Buying a home one day is part of the American dream for a lot of people living in the United States. Many people who are thinking about going through the bankruptcy process are concerned if it will affect their chances of getting a home loan in the future. Going through a bankruptcy can be a stressful and time-consuming situation. We at The Weller Legal Group are here to help make the bankruptcy process easier and more efficient for you and your family. In this article we are going to discuss the subject of qualifying for a mortgage after a bankruptcy. If that’s something that interests you make sure to read through this entire article.
Bankruptcy On Your Credit Report
How long will my bankruptcy remain on my credit report? This is a common question that gets asked a lot and is important for you to know. If you are planning to go through with a Chapter 13 Bankruptcy it will remain on your credit report for 7 years. With that being said, if you are planning to file for a Chapter 7 Bankruptcy, this will remain on your credit report for 10 years. Make sure to discuss with your attorney ahead of time which type of bankruptcy would be best suited for your case.
How Long Before I Can Apply?
After you are finished with the bankruptcy process you will not be able to apply for a mortgage loan right away. If you wanted to apply for a conventional loan you will have to wait at least four years after a discharge of a Chapter 7 Bankruptcy in order to be able to apply for a conventional home loan. If you went through with a Chapter 13 Bankruptcy you will have to wait at least two years before you are able to apply. Also, if you wanted to apply for an FHA loan you will have to wait at least two years if you filed a Chapter 7 Bankruptcy before you are able to apply. If you filed a Chapter 13 Bankruptcy you can apply for an FHA home loan as long as you have made at least 12 months of consecutive bankruptcy payments on time. Something to keep in mind is that you will need to get the approval of the bankruptcy court in order to be able to apply for this home loan.
Improving Your Credit
It may feel like the end of your home ownership dreams after a bankruptcy but that is not always the case. After you are finished with the bankruptcy process you may even start receiving offers from credit card companies. It is important that if you take any of these offers you are careful with them so you don’t get in trouble with debt again. These credit card offers may have very high interest rates but if you are able to use them and pay them off before you get charged any interest this may help with rebuilding your credit. Make sure that you don’t miss any payments and try to pay your bills in full each month to avoid paying any interest.
Bigger Down Payment May Help
If you are looking to apply for a home loan after a bankruptcy it may be wise for you to try and save up as much money as you can for a down payment. You are much more likely to get approved for a home loan if you can come up with a 20% down payment in comparison to if you are only able to come up with a 5% down payment. Anything that you can do to help increase your chances of getting your loan approved, you should definitely look into especially after a bankruptcy.
Be Patient
The road to getting approved for a mortgage after a bankruptcy is a long and tedious one. It is important for you to try and maintain a positive mindset while you are going through the entire process. Hopefully after the bankruptcy is finished you will be in a much happier place, mentally, spiritually, and financially. It is important to be patient after the bankruptcy process is finished because it will take time to rebuild your life and your credit. If you are able to take the steps necessary to rebuilding your credit, the path to home ownership could very well be a possibility in the not too distant future.
Final Thoughts
We at The Weller Legal Group hope that the information provided to you in this article helped you understand more about the subject of qualifying for a mortgage after a Chapter 7 or Chapter 13 Bankruptcy. We at The Weller Legal Group have over 25 years of experience in helping our clients with their bankruptcies and improving their credit scores. We have offices located throughout Florida, including, Clearwater, Port Richey, and Lakeland. If you have any other questions in regards to filing bankruptcies or working on improving your credit score feel free to give us a call today at 1-800-407-3328.
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