Can I buy a house after bankruptcy?

Can I buy a house after bankruptcy?

Yes.  You will be able to buy a house within two years after filing Chapter 7 bankruptcy.  Many mortgage lenders will provide a home loan within of two years after you are discharged from bankruptcy.  Although your bankruptcy is recorded in your credit report for ten years, buying a house is buying a secured property.  This means that the bank has a lien or security interest on the house you are buying and in the worst event that you could not pay your mortgage; they can foreclose your house.  Home loans are different from credit card loans because credit card debt is unsecured and creditors will not recover anything if you have no asset to pay for it.

Question:    What are the steps that I should do to get a home loan after bankruptcy?

Answer:     First of all, start rebuilding your credit by doing the following:

1.    Do not incur more expenses than your income.  You must have a budget and keep track of your budget.
2.    Do not overextend yourself by incurring more debts that you could not pay.  Example is buying a car that you cannot afford.
3.    Check your credit report for accuracy.  There are many inaccuracies in the credit report that you need to dispute.
4.    Start with a secured credit card that will rebuild your credit.  A secured credit card is reported in the credit report and if you pay on time your score starts to improve.  Within two years you should be able to improve your credit score.
5.    Find a house that is within your budget.  If your budget for a mortgage is $1500 a month, look for a house with less than this amount to provide for any unexpected expenses.
6.    Look for a good broker who can help you prequalify for a loan and get a good interest rate.
7.    Avoid companies that offer services that promise to “repair your credit fast.”
8.    If you bought a house with high interest at the start try to refinance it after one year.\

Note:    This is not a legal advice.

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