Bankruptcy and Buying a Home – 3 Benefits to Buying a Home after Bankruptcy
Bankruptcy can be a breath of fresh air on one hand and a lung full of smoke on the other. Life after bankruptcy means you will be debt free and you will be able to start all over again but with a looming bankruptcy in your financial records for another 10 years it may not be the easiest time of your life.
If you want to purchase a home after declaring bankruptcy you actually can do so. You will have to be honest form the get go and provide the true information about the credit ratings you have. Since you no longer owe the debts that caused you to declare bankruptcy you can review your credit. At the beginning they may decline you because of your previous debt but showing that they are all gone can make a big difference.
Where can you find this information? First you want to get your credit profile from the major credit bureaus. This should be easy to obtain. If you see a report that states that you still have a balance you need to have that sorted out right away. Go back to the company or lawyer that helped you to go through with the bankruptcy filing and bring it to their attention.
After you have the right information you should formulate a letter to your creditor where you will ask them to alter the list. You can use a credit repair kit or a credit repair service if you can afford to.
Once you have that in hand you can now find a mortgage company that specializes in offering mortgages to persons who are trying to better their life after bankruptcy. These lenders can approve a loan even within a day of your bankruptcy file has been discharged. There will be different packages and terms for you as you have a bankruptcy on file than for others but all is good once you understand the terms and are in agreement with them.
When purchasing a home after bankruptcy the one thing you will definitely need is a down payment no matter how small it is. If you have a good amount to use for your down payment you may have a great chance of the bank financing the rest. If you don’t have any money or just a little to use for the down payment and that is posing a problem you could find down payment assistance in your area or you could borrow from friends or family who are willing to give you a loan.
Down to the three benefits – what are they?
- This can increase your credit score. Once you are approved and get your mortgage and your house and pay your bill on time each month then your credit ratings will start climbing. If you keep it up you could even refinance your home for a lower interest rate sooner than you think.
- You can gain equity on your home. If you were renting you would still be making monthly payments and those would be going to someone else’s pocket, this is a great way to invest in yourself and your future.
- It can help with debt consolidation. How? – By taking out an equity loan.
There you have it how to make your life after bankruptcy a better one by buying a home.
