Filing for bankruptcy can be a difficult time for anybody. It can be a little embarrassing and many think that it will completely ruin their futures. Fortunately, this is not the case, especially when it comes to home buying.

In fact, depending on the type of bankruptcy filed and the loan applied for, some people can get a mortgage in as quickly as one year.

“Some people go bankrupt for no reason of their own accord,” says Wes Moore, president of the New Mexico Mortgage Lenders Association. He also serves as senior loan officer at First Mortgage Company in Albuquerque.

“What the underwriters look for after bankruptcy is what has changed since you filed. If you have reestablished credit, paid your bills on time and have a good income, then great,”

“If you have gotten a car loan and got a few credit cards and you are paying on them, you are doing it all right.”

Building back credit is an important first step to getting approved for a mortgage. After bankruptcy, home buyers could even eventually build their credit higher than it was before.

For those looking to get approved for a mortgage as soon as possible after declaring bankruptcy, there are options available. However, nobody should lock in on the first mortgage they can get approved for. Getting quotes from multiple lenders could offer a more buyer-friendly mortgage option.

Picking the right mortgage after bankruptcy

Mortgage lenders understand that bankruptcy is sometimes unavoidable for some people. Rather than write them off, lenders will take a serious look at the financial situation of those who previously declared bankruptcy and are applying for a mortgage.

“Bad things happen to good people. I can see a bankruptcy happening to someone who worked for a car manufacturer who laid off 8,000 people,” Moore said. “It’s all about what has happened in your life.”

Understanding that bankruptcy is not going to prevent home buying is important. While it does take smart financial decisions and time, mortgages from those who previously declared bankruptcy are not rare.

It is also important to understand the two types of bankruptcy. The two most common bankruptcies are Chapter 7 bankruptcy – which is where the slate is wiped clean and you no longer have those debts – and Chapter 13 – you are still paying your creditors back but maybe at a reduced rate and for usually five years, Moore says.

There are multiple options available to those looking for a mortgage after bankruptcy. The waiting times for each loan depend on whether someone files for Chapter 7 or Chapter 13 bankruptcy.

Here are the waiting periods for certain mortgages after a discharge of bankruptcy (this is not the filing date but the date that the judge discharges you from your debt):

Back to Work: FHA loan for extenuating circumstances

This federal program allows those who have had a bankruptcy, foreclosure, short sale or deed-in-lieu of foreclosure to qualify for a new home loan within one year if they are back to work and can document the extenuating circumstances for their situation.

However, this specific program is ending on September 30, 2016, so those who think they might be eligible should consider checking their eligibility.

FHA, USDA and VA loans

If you filed Chapter 13 bankruptcy, you probably have a court-approved plan to repay some of your debts. If you have made all your payments on time, you could qualify for an FHA, VA or USDA mortgage as soon as one year after the repayment program.

With a Chapter 7 filing, you could qualify within two years if you restore your credit and manage your finances well. There is also a chance that you can qualify Chapter 7 filing after one year if you have extenuating circumstances.

Conventional loans

When it comes to bankruptcy, conventional loans are the most difficult to get approved for in a quick manner. If you are hoping for a conventional loan, which is a loan that is not backed by the government, then it could take as long as two years for Chapter 13 and up to four years for a Chapter 7.