1. You'll Need To Endure a Waiting PeriodPrior to applying for a mortgage following a bankruptcy, you must be certain the waiting period has been satisfied. How long the wait is varies according to the type of mortgage you're applying for.

Chapter 7 Bankruptcy Waiting Periods for a Mortgage:oConforming (Fannie Mae or Freddie Mac) : 4 YearsoFHA loans: 2 YearsoVA home loans: 2 YearsoUSDA home loans: 3 Years

However, if you've had an extenuating circumstance the waiting period may be reduced to two years for a conventional (conforming) loan. If you're in the market for an FHA loan, the waiting period can be lessened to one year if the bankruptcy was attributed to a job loss and you are currently gainfully employed.

2. Foreclosure May Mean a Longer WaitPurchasing a home after a foreclosure is longer wait than if you filed for bankruptcy. Fannie Mae requires a three-year waiting period If your home loan is defaulted through foreclosure due to extenuating circumstances (layoff, divorce, death). Fortunately, you may be able to get a reduced} waiting period if you had a foreclosure and the mortgage debt was discharged in a bankruptcy. Under normal conditions through Fannie Mae guidelines, there's a seven-year wait period.

As soon as the waiting period has ended, you're legally able to apply for a mortgage. With that in mind, you will not get the best available rates. Bankruptcies remain on your credit report for up to 10 years and lenders usually charge higher fees and interest rates.

Through the waiting period, it's better to concentrate on improving your credit score and save up for a larger down payment than the minimum. The best way to do is to pay your bills on time and obtain new credit by getting a secured credit card that reports to the three bureaus.