14 May Boomerang Buying – It’s Possible!
History has indicated that it’s virtually impossible to get a mortgage after a bankruptcy. It is a whole new housing market today and, while it’s not a cakewalk, it’s definitely possible. How do you qualify for a home loan after going through a bankruptcy? Zip Realty shares some realistic and helpful tips.
You’re not the only family that experienced the recession and foreclosure crisis. Filing for bankruptcy became a more common occurrence than you may realize.
While it is still not looked on positively by lenders – they need to make sure these people are back on track when they’re reapplying for a home loan – but they certainly don’t turn people down just because of a bankruptcy anymore.
A bankruptcy remains on your credit report for 10 years, but you can get a mortgage long before that time is up. According to Zip Realty you will need to wait, depending on which type of bankruptcy you filed and what kind of home loan you’re applying for. Your bankruptcy must be discharged and the proceedings will generally need to conclude before you apply. There are varying wait times, but a good rule of thumb is two years.
Over that period, it’s imperative that you rebuild your credit! How do you do this? Pay all your bills on time, stay at the same job, and try not to take on any new debt.
You’ll want to be in the best financial position when you apply, including having a healthy debt-to-income ratio, to show lenders that you can afford the home and the mortgage.
It’s always helpful to talk with a local mortgage consultant to get the specifics of your situation answered. But buying a home you love is possible with time and smart financial decisions.