Bankruptcy and Buying a House - Is it Smart to Buy a House after Bankruptcy? 

The following tips can be used for purchasing a house after filing for bankruptcy. How to buy a house after bankruptcy A FICO credit score of minimum of 620 is needed to buy a home. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit.

by Christopher Hobbs Wednesday, April 06, 2011
If you have recently been through bankruptcy, or are currently considering filing bankruptcy, you may be wondering about how this will affect your credit. Specifically, you may be wondering if you'll be able to purchase a home when the lenders see the bankruptcy on your record.

You should know that bankruptcy typically stays on your record for about 10 years, but this doesn't mean that you won't be able to get any kind of credit for all those years. In fact, some types of creditors actually seek out people who have declared bankruptcy because they know that a clean financial slate will make it easier to deal with monthly payments.

The good news is that it is possible to buy a home after bankruptcy, but you may have to pay higher interest rates as a result. However, your situation can improve if you consistently make your payments month after month or if it has been a couple of years since your bankruptcy.

What are some of the benefits of purchasing a home after you declare bankruptcy? Well, most people who have been through bankruptcy wish to rebuild their credit in case they need it in the future. Obviously, you need to be careful not to begin spending recklessly, because that may be what put you in financial turmoil to begin with.

Buying a home is one of the ways to reestablish your credit, not to mention that you'll save money in the long term by avoiding monthly rent. You should realize, of course, that reestablishing your financial credit takes time, so you should be patient if you run into any obstacles along the way.

Remember to see bankruptcy as a fresh financial start that you can use to build a solid foundation for your financial future.

Each year, millions of people file bankruptcy as a means of erasing

their consumer debts. While this approach may relieve stress, a bankruptcy

is damaging, and will hang over your head for the next ten years.

Still, it is possible to overcome bankruptcy. The key is making smarter

financial and credit decisions. With this said, some people choose to

purchase a home after a bankruptcy. Here are a few pointers to consider when

buying a home.

Reasons to Delay the Buying Process after Bankruptcy

If you consult with mortgage or financial experts, they will likely

discourage you from buying a home following a bankruptcy. After your

bankruptcy is discharged, there is a black cloud that looms over your credit


When any prospective lender reviews your report, they will be notified

of your recent or past bankruptcy. In some instances, this justifies an

immediate denial. On the other hand, there are lenders eager to help

you establish or rebuild your credit. Thus, they will approve a loan

request. Nonetheless, the penalties are steep.

Higher mortgage rates can be anticipated when purchasing a home after

bankruptcy, especially if you have not established other credit

accounts. Mortgage lenders consider two factors: credit scores and credit


Although a bankruptcy appears on your credit report, having a high

credit score will increase your odds of getting a comparable rate.

Unfortunately, if you buy immediately following a bankruptcy, you will not have

the opportunity to boost your score.

Reasons to Buy a Home after Bankruptcy

Lenders will approve mortgage loan applications one day following a

discharge. Therefore, it is possible to get a home after a bankruptcy.

General | Categories: financial, housing
0    submitted by Christopher Hobbs
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