Recovering from foreclosure or bankruptcy takes time and effort. However, that doesn’t mean that you can cross homeownership off of your list forever. Just a few years after your bankruptcy, you could potentially close on a home loan and become a homeowner again.
If you have bad credit and are wanting to purchase a home for the first time, then you should check out something like this First Time Buyer Loan for Bad Credit. Loans can get confusing so do your research and find out all the facts before you do anything.
The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13. Depending on how you file, that will affect how quickly you will be able to buy a home again.
The exact type of loan you are looking for will also determine how long you need to wait after bankruptcy or foreclosure.
In Chapter 7 bankruptcy, the clock starts ticking when the action is discharged. Then, it’s a 4-year wait for a traditional loan and 2-year wait for an FHA or VA loan. Chapter 13 bankruptcies vary a greater amount, but you might be able to get a loan only 1 year after filing.
When the two separate filings mix together, things get much more complicated. If a buyer goes bankrupt and then has their home foreclosed in the following months, there are two separate periods that will be taken into account.
Depending on the guidelines of the specific lender, you might be able to get a loan before too long. However, qualifying from a credit standpoint will probably be your biggest issue.
Get your finances together. Take stock of your debts and credit report and focus on making positive financial decisions. If there are any mistakes on your credit report, now is the perfect time to correct them.
Grow your savings so that you can place the biggest down payment on a home possible.
The higher your payment, the higher the chance of you being able to acquire a home loan before too long.
Make a plan for purchasing a new home. Calculate exactly what you can afford to spend every month and take other costs, like regular maintenance and pest control, into account.
Organize all of your financial documentation so that you have proof of your income and financial status when you are planning to make a purchase. You should have together paper copies of things like bank statements, investments, tax records and insurance documents.
Shop around for mortgages with help from an expert, like Equity Mortgage. Depending on your exact situation, there might be avenues that you haven’t explored yet!
We are experienced in getting homeowners the best possible mortgage product for their situation. Since every client is in a different situation, we encourage you to get in touch and learn how we can help.
Contact us today by calling 443-471-4310. We look forward to hearing from you!
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