Is it possible to buy a home after filing bankruptcy?
Discover what it takes to buy a home after filing bankruptcy. Learn the steps to take and the details that will help make this possible for you.
Most people consider buying a home to be the “American dream.” However, for people who have a bankruptcy in their past, this dream may see fleeting. The idea of getting a mortgage after going through the credit damaging process of a bankruptcy may seem impossible. However, it is possible for someone to buy a home and qualify for a mortgage in South Carolina even with a bankruptcy in their past. It may take some time and work, but it can be a reality.
First steps to a mortgage after bankruptcy
If a person wants to focus on buying a home after filing for bankruptcy, it is important for him or her to wait until the discharging of the case, according to Money-Zine.com. Then, it will still take time as a person needs to rebuild his or her credit. Bankruptcy leaves a person at a real low point in regards to his or her credit score. This requires rebuilding.
The best options to rebuild credit to the point where a lender would consider offering a mortgage include secured credit cards, which require a deposit to open, or a small loan, such as an auto loan. Making regular payments on such debts will slowly help a credit score to rebound. In addition, if a person has student loans, staying current on them is helpful as well.
Checking the credit report
Credit reporting agencies are often slow in reflecting changes. Because of this, a person needs to check his or credit report regularly to ensure it reflects the bankruptcy action and the new credit accounts.
It is not likely any lender would approve a person for a mortgage right after a bankruptcy. It may be possible for a person to get a loan in as little as 18 months. However, Amerifirst notes that a more likely waiting period is two to four years.
While a person waits to become eligible, he or she should work on building credit and saving a down payment. Having a nice size down payment is incredibly helpful since interest rates for someone who has a less than stellar credit history will probably be higher than average.
Buying a home after a bankruptcy is not a pipe dream. It is a real possibility if a person plans carefully. To make things easier, it may also help to work with a qualified attorney, such as the professionals at Meredith Law Firm, LLC, who can assist with the process.