One of the most common misconceptions about filing for Bankruptcy is that the debtor will not be able to purchase a home ever again or at least for 10 years. This is not true.
A Bankruptcy Discharge will be the last derogatory item reported against a debtor if he / she manages their finances properly moving forward. There are ways to rehabilitate a debtor’s credit score significantly, even within the first year. Taking steps to clean up one’s credit report, obtaining a secured credit card and, for those who rent, reporting on time rental payments are a few of the ways to improve one’s credit score. The first step to purchasing a home is to properly manage your finances and avoid any late payments. Consulting with an experienced Bankruptcy attorney can help you tailor a plan to meet your goals.
The next step is to save as much money as possible. In most cases purchasing a home will require some down payment and costs.
Finding a good and experienced mortgage broker early on is very helpful. There are many mortgage options available. Some require limited down payment and you can qualify in two years after receiving your bankruptcy discharge. There are great first time home buyer programs (in Connecticut this requires not owning a home for the last three years). Some mortgages require you to wait three or four years after discharge. There are even lenders that will lend within the first year. All of these programs have different pros and cons and qualifying criteria. The better mortgage brokers will be happy to meet with you even before you are qualified or ready to apply for a mortgage. They can help you be prepared to qualify for the mortgage that is best for you when the time is right. The broker can also update you if new programs become available or others have changes.
It all begins with maintaining and improving your credit score and saving as much as you can. Be committed to your financial plan and you may be able to own a home within two years.
Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.