Many people mistakenly believe that they won’t be able to buy a house at all after filing bankruptcy, or at least until the bankruptcy falls off their credit report after 7-10 years. This isn’t necessarily true. In fact, there are ways to purchase a new home after a successful bankruptcy. Doing so may even help you get your credit back on track. Here’s what you need to know.
What is Your Waiting Period?
While you don’t necessarily need to wait 7 or 10 years before buying a house, you do need to wait for a certain period of time. The length of time typically depends on what type of mortgage you seek. The most generous types of mortgages (VA loans and FHA loans) have a two-year waiting period. Other types of mortgages have a four-year waiting period. Know ahead of time how long you need to wait before you start looking at houses.
Where Is Your Credit Right Now?
Since you have to wait after your bankruptcy to be approved for a home loan, use this time to find out what your credit score is and begin rebuilding it. Your credit score will likely be very low right after your bankruptcy. However, you can rebuild it with secured credit cards and a solid repayment history.
How Much Home Can You Afford?
One thing you definitely don’t want to do after bankruptcy is to purchase a home that is out of your price range. This is true even if you meet all the guidelines for buying a more expensive house. You need to be absolutely positive that you can afford the upcoming mortgage payments and you won’t fall behind — falling behind on a mortgage after declaring bankruptcy may lead to your home being foreclosed on and your credit taking an even bigger hit. It’s often even more difficult to buy a home after a foreclosure than a bankruptcy.
Contact Us Today for a Consultation
After living with crushing debt, you too can obtain financial freedom and get back on track with the help of an experienced Florida bankruptcy attorney. Learn more about how bankruptcy can help you and how it will affect your future and plans to purchase a home by contacting our office for a consultation to go over the specifics of your case. Call now to set up an appointment for a consultation at (904) 354-6604.