Can You Purchase A Home After Bankruptcy?

 

Perhaps the title above is a bit misleading—anyone can purchase a home…if they have the money. The problem is getting a lender to approve a mortgage when you have a bankruptcy on your record. No need to despair, however, as many previous homeowners who have needed to file have been able to obtain financing, it just takes time, dedication, patience and planning. Join us as we discuss what to expect regarding purchasing a home after filing for bankruptcy.

Your Bankruptcy Has Been Discharged, Now What?

Generally speaking, there are two types of bankruptcies the general public may file:

Chapter 7 – clears all of your debt.

Chapter 13 – permits structured repayment of your debt over the course of several years.

Regardless of the type of bankruptcy you have filed, how quickly you can attempt to secure financing for a new home depends on a variety of criteria.

The first step is to start the process of rebuilding your credit. This process isn’t as scary or difficult as you may have been lead to believe. You must begin to use credit wisely. Lenders will offer a variety of credit cards to help with this process as, ironically, you are now considered a good risk! We know what you’re thinking, “How can that be?” Simple; various laws are in place that will not let you file for bankruptcy again for several years.

The Long And Winding Road Back To Homeownership

Realistically, you will need to wait approximately two years before you can seriously throw yourself into full house hunting mode—if you’ve done your due diligence.

During this period you must address the following:

 

Take this opportunity to work on all of the above. When you honestly feel prepared to purchase a new home, take a deep breath and prepare for the next step in the journey.

Select The Proper Real Estate Agent

You’ve been patient so far, but it’s going to take a bit more time before you’re signing the papers on your new home. At this point it’s crucial that you find the right real estate agent to help you find the perfect home. It’s important to explain your past financial history with your agent as they will be able to help you with the next important step.

Get Preapproved For Your Mortgage By A Reputable Lender

You’re almost there, but before you visit your first open house or look at available homes for sale, do yourself a tremendous service—get pre-approved!

There are several reputable mortgage companies available that will be able to tell you exactly how much home you can afford, keeping your expectations within the realm of reality. They will also be able to explain a variety of financing options to help you make reasonable monthly payments while protecting your now improved credit score!

Filing for bankruptcy is difficult, but it doesn’t eliminate you from ever owning a home in the future. Be cognizant of the fact that it will take time and effort, but if you put in the work to rebuild your finances, you can once again become a proud homeowner!

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