One of the big fears a lot of people have about filing for bankruptcy is the belief that they will never be able to own a home after that. This isn’t true and you could be a proud homeowner not long after filing for bankruptcy. Here’s what you have to do.
- First, you have to be patient. This process should take you a little time. If you try to apply for a mortgage too soon, you might actually get it, but the interest rate will likely be so high that you could find yourself in trouble again later.
- After your bankruptcy is finished and you are no longer in mandatory credit counseling, take a look at your credit report. Make sure to dispute any errors you see like debts still showing up after you’ve paid them or they’ve been discharged. There are a number of places that will allow you to get one free credit report online. Use them to view your report and dispute any mistakes.
- Rebuilding your credit is the most important part of this process and will be slow-going so don’t try to rush. The quickest, safest way to do that is to get a secured credit card and installment loans. A secured credit card is just like any other credit card except that it has a safety net. When you get the card you will be required to pay the monthly limit of the card in full so that should you fall behind or get into trouble, it will be covered. Start with a lower limit and work yourself up as you go.
- Some other tips to keep in mind as you rebuild your credit:
- Make your payments on time and try to pay more than the minimum each month.
- Do not spend the full limit of your credit card.
- Pay your bills on time.
- Save at least 5-10 percent per month for emergencies.
- Stay at the same job. It shows stability.
- Apply for the mortgage only when you know you are ready. Jumping into it before you are positive you can handle it could potentially end in disaster. Have money in the bank to make a big deposit. It will help to show the lender that you are ready and serious about being financially responsible.
Overall, the key here is to just be patient. Take it slow and keep your credit clear of any more marks after filing for bankruptcy. Buying a house after bankruptcy can absolutely be done, but it requires some patience.
Judd Law Firm– Your Gateway to Financial Freedom