How to buy a house after bankruptcy

Every year, roughly 800,000 people in Florida and throughout America file for bankruptcy. While there may be significant consequences for doing so, it does not prevent a person from buying a home. However, it will likely delay a person’s goal of being a homeowner. In many cases, individuals can become eligible for a home loan in as little as two years after a bankruptcy case is resolved.

Those who file for an FHA loan may be allowed to get a loan only a year after a bankruptcy. As a general rule, the longer it has been since the bankruptcy, the better a person’s odds are of getting a mortgage because lenders will view the applicant as less of a risk. The first step for someone who wants to become a homeowner after bankruptcy is to reestablish a good credit score and history.

This can be done by opening one or two lines of credit and making timely payments on them for 12 months or longer. Furthermore, borrowers generally cannot have any late or missed payments if they hope to qualify for a mortgage quickly after a bankruptcy. Borrowers may also want to check their credit reports to make sure that there are no errors that could reduce their odds of getting a home loan.

Filing for bankruptcy may be a way to eliminate debts that are standing in the way of accomplishing long-term goals such as buying a home. Those who make sufficient income could still be appealing to lenders even after a bankruptcy. This is because their income might give them an opportunity to make secured or unsecured debt payments in good faith. Bankruptcy can also allow individuals to renegotiate current debt terms to make them easier to handle.