Can you get a home loan after bankruptcy?

Darren's savings and discharge evidence gave me something to assess. A lender still needs to check the repayments and property before approving a loan.

Pepper Money's consumer guidance says it may consider borrowers after discharge, looking at current employment, income stability and savings. The waiting period and lending limit still need to be checked for your application.

Discharge means the formal bankruptcy period has ended. It generally lasts 3 years and 1 day, according to AFSA, although the start date depends on how the bankruptcy began and an objection can extend it. Get the discharge confirmation from AFSA or your registered trustee rather than working it out from memory.

You don't necessarily have to wait for the bankruptcy to disappear from your credit report before a lender will consider you. The discharge date, the credit-report dates and the lender's waiting period are different things.

Every bankruptcy has its own cause, whether it was a failed business, illness or a run of missed payments. The lender wants to understand yours, and you can keep it short. Our explanation-letter guide shows how to set out what happened and what has changed.

Work out the deposit using the lender's limit for your application. An advertised maximum loan-to-value ratio (LVR) may not apply after bankruptcy. Using the wrong limit can leave you short when it's time to buy.

A few more months can help if you're saving a bigger deposit or building a record of payments made on time. Ask what would change the lender's answer and when to check again.

Pepper, Bluestone and Resimac don't all treat a past bankruptcy the same way. Our reviews explain their products and credit rules. I check which one can accept your discharge date, deposit and property before you apply.

The permanent NPII entry does not rule out every home loan. Even after bankruptcy leaves your credit report, a lender may ask whether you have been bankrupt before. You still need to answer that question accurately. AFSA explains both records.

If the trustee is still dealing with money or an asset you hope to use, include their written confirmation. Let me know about any debts or payments that continue after discharge too.

Tell me if some of the deposit is a gift. It may be acceptable, and lenders don't all require the same savings history. I need to check what documents yours will accept. You don't need to open extra credit accounts just to try to build a score.

Buying now can make sense when it solves a housing problem and you can afford the specialist loan. Waiting can make sense too, especially if a bigger deposit or a longer repayment history would open a cheaper option.

Ask for the comparison in dollars for the amount you want to borrow. Include the interest rate, establishment fees, any risk or lender-protection fee, valuation and legal costs, ongoing charges and the cost of leaving.

Use the same loan amount and term when comparing lenders. For buying now versus waiting, include the rent you would pay while waiting and the savings you expect to add. Ask what specific improvement would open another lender option; a future rate or property price cannot be known.

A 20% deposit is only part of the money you need. There may also be stamp duty, conveyancing, inspections and lender fees to pay. Then there's the cash you want to keep after settlement.

Darren had $135,000 saved. On his proposed $580,000 purchase, the $464,000 loan left him needing to put in $116,000 towards the price.

That left $19,000 for buying costs, loan costs and the money he wanted to keep aside. Even with a 20% deposit, I still needed to check whether that would cover the costs and leave him enough cash after settlement.

Already own a property? Start with the lender's valuation and borrowing limit, then subtract your current loan payout and refinance costs. What remains is the equity you may be able to use. You still need enough income to repay the proposed loan, and trustee confirmation if the property or money remains part of the bankruptcy estate. Our refinancing with bad credit guide takes you through the calculation.

1. Confirm your discharge with AFSA or the trustee and check the credit-report dates.
2. Add up the deposit, buying costs and money you want to keep aside.
3. Check that the repayments work on the loan you're applying for.
4. Check that the lender will accept the property you want to buy.
5. Have your solicitor review the finance clause and settlement timing.

A pre-approval can still depend on the property, valuation and updated documents. Speak with your solicitor before waiving a finance condition.

For defaults, hardship and other credit problems, return to the bad credit home loan guide. A Part 9 debt agreement has different legal and reporting rules.

Client examples are based on real situations. Names and identifying details have been changed.