Advice On Getting a Home Loan After Bankruptcy

young caucasian couple having debt problems after home expensesIt’s not uncommon for people to need to file for bankruptcy at some point in their lives. However, getting a home loan after filing for bankruptcy may prove challenging while it’s still reflected on your credit report.

Regardless, there are some things you can do to make the process easier and reduce the likelihood of being denied.

The best choice for a successful loan application is securing bankruptcy lawyers in Mobile, AL, to help you navigate the process. The Loris Bankruptcy Law Firm professionals are here to help, so reach out today.

Can I Get a Home Loan After Bankruptcy?

You may be wondering if you can succeed in buying a home after bankruptcy. The short answer is yes.

Getting a loan after bankruptcy is possible as long as your bankruptcy has been discharged. You can secure a loan if the debt is discharged and your creditworthiness is established. There are some points to consider and tips to follow first.

You’ll want to ensure you don’t have any errors on your credit report before you submit a loan application. Check addresses, credit details, conditions of satisfying debts, and any other information that affects your score. If you find mistakes, create a dispute through the credit agency.

Wait for the errors to be corrected before proceeding. You’ll also want to ensure you have good current credit and a significant down payment to have the best odds of getting approved.

How Long Does Bankruptcy Affect Your Credit Score?

Both Chapter 7 and Chapter 13 bankruptcy affect your credit score for years. That’s why you must ensure that the bankruptcy’s impact on your credit report is over or will not affect your chance for a home loan.

Chapter 7 is when your debts are dissolved and your assets are liquidated. This type of bankruptcy affects your credit for up to 10 years. However, Chapter 13 is an adjustment of debt and can affect your credit for up to 7 years.

How Long Do You Have to Wait After Bankruptcy to Get a Home Loan?

You usually must wait at least one year or more to apply for a loan after your bankruptcy. The best way to know, according to your particular situation, is to consult with a bankruptcy attorney in Mobile, AL.

How to Apply for a Home Loan After bBankruptcy?

Individuals planning to apply for a loan after bankruptcy should know which loans and programs to consider.

The first is a Federal Housing Administration loan or FHA. These government-backed housing loans offer lower interest rates and down payments. However, you must have mortgage insurance included, which increases the cost of your monthly income.

In addition, there are also USDA loans from the Department of Agriculture. These loans have specific requirements and assist with buying in a rural area.

These are also ideal if you have a lower income and have issues with a conventional loan application. A USDA loan usually has low interest, and you may secure it with little to no money down.

People who have served in the military may be eligible for a Veteran’s Affairs loan or a VA loan. There’s no down payment required, and you don’t need mortgage insurance if you acquire this type of loan. The same waiting period applies to those with an FHA loan.

How a Bankruptcy Attorney Can Help You

A bankruptcy attorney is an expert in all facets of bankruptcy and how it affects your finances, credit, and ability to acquire loans and financing after a bankruptcy. They can work with you to coordinate with creditors and give you the information you need to create a favorable situation for successfully getting approved for a home loan. They provide education and options that help you overcome negative impacts on your credit resulting from a previous bankruptcy filing.

Contact the Loris Bankruptcy Law Firm Today!

If you need a bankruptcy attorney in Mobile, AL, contact us to speak to our bankruptcy attorney in Mobile, AL. We can provide logical and practical solutions for helping you get the home loan you need and tips and methods for improving your creditworthiness.