Most people think that it’s not possible to obtain a home loan after you have applied for bankruptcy. Yes, it is a challenging process but not impossible by any means. In order to secure a mortgage after filing bankruptcy you need to; wait, make sure that your credit accounts appear as discharged in the bankruptcy on your credit reports, rebuild your credit and maintain steady work within the same field.
You may qualify for a FHA loan if you filed a Chapter 13 and have been making payments on time for twelve months. If a Chapter 7 was filed, you will need to wait at least two years after the discharge date before being eligible. Remember that the filing date is not the same as the discharge date.
Foremost, you need to ensure that accounts included in bankruptcy appear as such on your credit reports with each of the three agencies, Equifax, Transunion and Experian. This is better than accounts showing late payments or appearing in collection or charge-off status. File a dispute with each of the three agencies and send each bureau a copy of your discharge papers stating which accounts should appear as included in the bankruptcy. Disputes can be filed via mail, phone or fax. You will need to disclose your name, address, social security number and the exact nature of your dispute. The agencies have by law 30 days to investigate the claim once they receive your documentation and will send you a corrected report once their investigation has ended.
Re-establish your credit rating is also important. If you have current accounts in good standing it will be imperative to make the timely payments. If you do not have any accounts in good standing then you might want to open a few secured credit cards. Check to make sure that the issuing bank of those secured cards report to the 3 bureaus before you apply, or else it won’t have an effect on your credit. In order to rebuild your credit, you will need to have both installment and revolving accounts which are in good standing. Revolving accounts are credit card accounts while example of installment loans are car and student loans. Do not apply for too much credit at once since too many inquiries bring your score down.
Lenders will want to see you at the same job for at least two years. This shows stability and an ability to pay. It is also vital to keep your employment within the same field or line or work. Keep all your check stubs and tax returns on file since you will need to provide this information when applying with a lender.
Obtaining a home loan after bankruptcy may seem like an impossible task but with time and planning, anything is possible. You may want to use the waiting period (between a bankruptcy filing and mortgage application) to re-establish your credit, dispute and correct discrepancies on your credit report and maintain steady employment. With a bit of planning and organization, it is possible to obtain your very own home even after a bankruptcy filing.
Written by Jacqueline Star: Refinance, San Diego New Homes