Is it possible to buy a home after filing bankruptcy?

by Robert R. Meredith on Oct. 14, 2019

Bankruptcy & Debt 

Summary: Buying 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.

Waiting period

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.

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