After two years of unemployment and bankruptcy, I finally have a steady job and can buy a house. How long until we can apply for a mortgage?

I'm glad to hear you're getting back on your feet. You'll be glad to know that you may be eligible for a mortgage sooner than you think. It sounds like you probably filed Chapter 7 bankruptcy and eliminated all of your debt, in which case you can apply for an FHA or VA loan two years after the date the bankruptcy was filed. More than likely, an FHA loan will be easier to qualify for (unless you are a veteran and can use VA financing) than a conventional loan. You'll have to wait four years after a bankruptcy to apply for a conventional loan.

Some FHA lenders may even approve a mortgage earlier than two years after bankruptcy depending on your credit and the reason for the bankruptcy. If you had good credit before the bankruptcy and have taken steps to rebuild your credit after you found a job, you'll be in better shape for a loan approval than someone who had poor credit, pays bills late and has taken on too much debt.

Make sure you keep all the documentation from the bankruptcy and start rebuilding your credit now, if you haven't already. Your credit score took a hit from the bankruptcy and you need to get it up to 620 or 640 or higher to qualify for an FHA loan.

Start the rebuilding process by getting your credit report and checking your credit score.

Next, apply for a credit card. You may need a secured credit card at first, but it's important to have a card, charge items on it and repay those bills within a month or two to prove that you can handle credit and to boost your score.

You should also be saving money. Not only will you need some cash for a down payment and closing costs, but you will also need cash reserves for emergencies. The more money you have saved, the more likely it is that a lender will view you as a good credit risk.

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