Purchasing a House after Bankruptcy

 Posted on January 17, 2020 in Credit Score

The American Dream is the belief that anyone can succeed in life as long as they work hard and persevere. For many, success includes purchasing and owning their own home. The process of buying a home can be a confusing process and includes many financial and legal procedures. For those who have gone through bankruptcy at some point in their lives, purchasing a home can be even more difficult and confusing. There may be limitations to how much you can borrow from a lender or how soon you can buy a home, but it is not impossible.

Check Your Credit Report

Before you begin to apply for mortgages, you should pull a copy of your credit report. Your credit report will contain detailed information about your credit history, including your borrowing history and information about your bankruptcy. You should carefully look over this report to make sure that everything is correct on the report and that there are no mistakes that could make your report look more unfavorable than it really is.

FHA Home Loans

If you have filed for bankruptcy, one popular option that prospective homeowners consider is what is called a FHA home loan. A Federal Housing Administration (FHA) loan is an attractive option for many people who have gone through bankruptcy because they require low down payments and you do not have to have a high credit score to qualify. The minimum down payment for a FHA loan is 3.5 percent of the price of the home and you only need a credit score of 580 to qualify.

If you filed for a Chapter 7 bankruptcy, you will have to wait at least two years after the discharge before you can apply for a FHA loan. If you filed for a Chapter 13 bankruptcy, you can apply for a FHA loan as long as you have made one year of on-time payments.

Questions About Your Bankruptcy? A San Antonio, TX Bankruptcy Attorney Can Answer Them

Buying a home can be a stressful process for anyone, but for those who have recently gone through a Chapter 7 or Chapter 13 bankruptcy, it can be even more difficult. At the Law Offices of Chance M. McGhee, we understand how significant owning a home is for many families. Our skilled Boerne, TX bankruptcy lawyers can help you understand the home-buying process after you have filed for bankruptcy. To schedule a free consultation, call our office today at 210-342-3400.

Sources:

https://www.thebalance.com/how-soon-you-can-qualify-for-a-mortgage-after-bankruptcy-4160973

https://www.investopedia.com/articles/investing/072515/buying-house-after-bankruptcy-it-possible.asp

https://www.credit.com/blog/2014/10/how-soon-can-i-buy-a-house-after-bankruptcy-or-foreclosure-98939/