| Buying a House After Bankruptcy |
| Written by Joseph Durrett | |
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Many consumers who file bankruptcy have already owned a home and probably lost their home. If a consumer intends to repurchase a home the main objective at this point is to work on getting the credit score back up. For many a great point to remember is if you were in that much debt to lose your home this is a whole new beginning. All you have to worry about now if your future. The stress will be much less and you can be more focused. According to Newsweek it can take up to three years to purchase a home after a bankruptcy. This is not bad at all if you are one of the consumers thinking it would be at least ten years. Right after your bankruptcy is filed it is wise to obtain all credit reports from the three major reporting agencies and make sure al debt has been wiped off of your account. Also double check and make sure there are no other mistakes on the report. The thing to remember is if you wait the minimal time to look to buy a home you will need to have a larger down payment so the time to begin saving is now. Even if you budget a small amount for each week and put it into an account. It will add up faster than you think as long as you do not keep borrowing from it and not paying back. There are some lenders that will make loans as early as six months after a bankruptcy is filed. But the problem with these hard-money lenders is they will require a higher down payment in the field of 20-35%. The interest rate is also be very high. The loan conditions will also not be great at all. They will incorporate prepayment penalties and such. If you as a consumer do not have to deal with this type of loan you are better off not to. The money that will be saved by working on your credit score and getting a better loan will pay off double if not more in the future. When a consumer is looking into buying a house after bankruptcy the one thing that much be done is the credit score must be improved. One of the best ways to accomplish this is to get a credit card. In the beginning right after the bankruptcy you may have to apply for a secured credit card rather than an unsecured. This is so that there is some type of guarantee that the account will be paid. The way a secured credit card will work is it will be linked to a savings account that the borrower or applicant must put money into. The money that is in there is the spending limit on the card. After some time of using a secured credit card and paying the balance when it is due you will be able to obtain an unsecured card. Always remember to pay the credit card bill as soon as it comes due. In trying to rebuild your credit for buying a house after bankruptcy is to always pay your bills on time. All of the utility companies as well as many other companies report to the three major reporting agencies. The three agencies are Equifax, Experian and TransUnion. What want these on-time payments to show up on the report, as this is the way to bring up the credit score. When making decisions about buying a house after bankruptcy one must show steady employment for at least a year or two. A consumer has to earn what the business calls a regular salary. When buying a house after bankruptcy make sure to have at least 10 percent saved as a down payment. The more you can save for the down payment the better off you will be and the mortgage payments will be that much lower. Avoid any type of late payments at all costs. This will show up on your credit report and it will hurt you. If you fear having a late payment do whatever is humanly possible to avoid it. For example if you have a payment due on a bill and you forgot to mail the check can it be paid online? Can the payment be sent via Western Union. Do whatever you can to get that payment there on time. Buying a house after bankruptcy is not impossible actually it is very doable. All a consumer has to do is concentrate on a few steps and the goals are obtainable and not out of reach. |
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