Will I Be Able to Ever Buy a House if I File for Bankruptcy?

 Posted on January 06, 2022 in Bankruptcy

Many people who are struggling with overwhelming debt hesitate to file for bankruptcy, even when it is their best option for debt relief. They worry that having a bankruptcy on their credit report will harm any chance they have of ever owning their own home. The reality is, however, that having delinquent payments and/or charged-off accounts on your credit report is just as – if not more – harmful and could torpedo any plans of obtaining approval for a mortgage. The following are some steps you can take to help obtain that approval in your post-bankruptcy life.

Rebuilding Credit Is Key

Once your bankruptcy petition has been completed and your debts discharged, although your credit score will likely be low, think of this as starting out with a new and clean financial slate. Rebuilding your credit should be your goal.

Start by looking over your credit report. Make sure that it is correct and that all of the items that were discharged in your bankruptcy have been removed from your credit report. Also, make sure there are no other derogatory items that should not be there.

The next step is making sure you pay all of your bills on time. The last thing you want to do after going through the bankruptcy process is to pay bills late, miss payments, and start accumulating debt again. This will just cause your credit score to decrease even lower, resulting in that dream of owning your own home becoming unattainable.

After filing for bankruptcy, it is crucial to set up a budget that not only includes paying your bills but also includes saving money. If you are committed to purchasing a home, you will want to make sure you save enough money for a down payment. The more you can put down, the better your chances are of being approved for a mortgage. Ideally, you should put down at least 20 percent of the total purchase price of the home.

This brings us to the next step – making sure the homes you are looking for are ones you can actually afford. Many homebuyers have a picture in their mind of the home they want until they begin house shopping and see what the actual prices are. One of the best ways to obtain that dream home is to purchase a smaller home within your budget and as your financial situation improves and the bank sees you making all of your payments on time, you can eventually upgrade to a bigger home.

Contact a San Antonio Bankruptcy Attorney

If you are struggling with debt, bankruptcy may be the answer. There are a few different types of bankruptcy options, depending on your particular situation. Call Law Offices of Chance M. McGhee at 210-342-3400 to schedule a free consultation with a New Braunfels, TX bankruptcy attorney and find out how we can help.

Source:

https://www.nerdwallet.com/article/mortgages/payment-buy-home