As an experienced Florida-based bankruptcy attorney, I have helped my clients get out of debt, qualify for loans, and buy a home after bankruptcy.

I have penned down the factors that determine how soon you can buy a house after filing bankruptcy and the steps to follow after bankruptcy to get qualified for mortgages.

How soon you get discharged from bankruptcy depends on the type of bankruptcy you choose. The most common being Chapter 7 and chapter 13

Chapter 7

In chapter 7, debts are wiped off by selling your nonexempt assets and the proceeds given to the creditor. In this case, your credit score will be affected.
Those who filed for chapter 7 must wait for at least four years after a court has dismissed their bankruptcy before applying for a mortgage.

Chapter 13

Also known as ‘reorganization debt’, chapter 13 allows debtors to keep their assets while making regularly scheduled payments to creditors. It is possible to keep a good credit score after being dismissed from bankruptcy.

As in the case of chapter 7, you have to wait for some time before being qualified to apply for a mortgage.

If the judge’s ruling is an order for dismissal, you are required to wait a minimum of four years from your dismissal date before you can apply for a mortgage and 4 years from the date you filed, and 2 years from your dismissal date if you were discharged. 

How To Get Qualified For a Mortgage After Bankruptcy?

IMPROVE YOUR CREDIT SCORE

Your credit will likely be affected by bankruptcy. The following are simple yet practical methods to increase your credit score.

• Checking Credit Report – Regularly check for any errors in credit reports and dispute them immediately. Keep an eye on credit score detractors such as Late or missed payments, high credit card balances, collections, and judgments.
• Don’t Miss Payment – Your payment history not only affects your credit score but also helps lenders get a view of your payment habit. Don’t miss loan and credit card payments by more than 29 days. Set up a scheduled payment for your bills and subscriptions.

   

• Pay Down Debts – Make it a habit to pay any debt you incurred, Don’t push debts to another month. Lower levels of debt can help you qualify for a mortgage. 

WRITE A LETTER OF EXPLANATION

Though a letter of explanation isn’t a requirement to get approved by lenders, it could be the difference between an approved loan and rejected one.
Your lenders have emotions too and may want to know the reason why you filed for bankruptcy. 

A good letter explaining in detail why you were filed for bankruptcy, what you have done to avoid future occurrence could be all a lender need to approve a loan.

GET PRE-APPROVED

Find out from your lender what his requirements are and see if your current financial standing meets up with them and if you don’t meet up, work hard to meet up or search for another suitable lender.

Recent pay stubs, W-2s, and bank statements are needed by lenders to request a pre-approver.

Need a qualified state-recognized attorney to help with the entire process? Contact Karen now to help you get approved for a mortgage after bankruptcy.