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Buying a House After Bankruptcy: A Brief Guide


According to standard guidelines, the waiting period for obtaining a mortgage after bankruptcy ranges from two to four years. This duration varies based on the type of bankruptcy filed, the loan in question, and other contributing factors. However, it’s important to note that completing this waiting period does not guarantee mortgage qualification for former bankruptcy filers. Additionally, while these waiting periods serve as general guidelines, they are not rigid rules. In certain cases, individuals may become eligible for a mortgage sooner, depending on their specific circumstances and improvements in their financial situation.

Much like a lawyer simplifies the bankruptcy filing process, an Irvine bankruptcy attorney can also facilitate the process of purchasing a house after bankruptcy. The attorney’s support extends beyond the conclusion of the bankruptcy case. They continue to provide guidance and assistance, helping you navigate the complexities of rebuilding your financial standing and embarking on significant financial milestones, such as homeownership. This ongoing support aims to help you move past your financial difficulties and start a new, positive chapter in your financial life.

House Hunting

Former bankruptcy debtors have limited housing options, especially when it comes to new housing. Furthermore, former bankruptcy debtors will pay higher interest rates. Anyone who says otherwise is simply telling you what they think you want to hear.

Post-bankruptcy fiscal responsibility, the bankruptcy explanation, and purchase flexibility are usually the keys to obtaining a post-bankruptcy mortgage.

Former bankruptcy debtors must stay current on their regular bills if they want to make a major purchase. Usually, they must have stayed current for at least ninety days. That means no late payments at all.

A credit card is usually an important part of this process. If debtors charge something every month and pay the balance in full every month, their credit scores rise more quickly. After all, your credit score measures your ability to manage credit responsibly, not your ability to pay cash for everything.

Your bankruptcy explanation is a semi-prepared statement about the reason(s) you filed bankruptcy. It doesn’t need to be exhaustive. Loan officers don’t need, or want, to hear all the details. Furthermore, you should present the explanation before the seller runs your credit record. No one likes unpleasant surprises.

Finally, damaged credit buyers must be flexible. Some sellers won’t work with former bankruptcy debtors as a matter of policy. Don’t take it personally and don’t be discouraged. Plenty of other lenders are available, many of which are willing to waive the strict waiting period requirement. As you look for a house and a lender, a Costa Mesa bankruptcy lawyer can point you in the right direction.

Making the Payments

Just like debtors must remain current on bills to qualify for a mortgage, they must remain current on mortgage payments.

Additionally, if possible, they should go the extra mile and make thirteen payments a year. Most people won’t miss the extra $100 or so per month. The financial reserve establishes goodwill, so when the next financial storm hits, the family can usually weather that storm. Additionally, prepaying principal usually saves buyers thousands of dollars in interest payments.

After about six or eight on-time payments, an attorney can usually negotiate with a mortgage company and obtain more favorable repayment terms, such as a lower interest rate.

Reach Out to a Hard-Working Orange County Lawyer

Regardless of your financial problems, there’s usually a way out. For a free consultation with an experienced bankruptcy lawyer in Santa Ana, contact The Law Office of Charles A. May.

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