Buying a home after bankruptcy
Are you thinking of buying a home after bankruptcy?
These are the home buying rules in place for people who want to get a
home loan but do not have a lot of money to put into the transaction.
First, let’s get our concept clear. There are two types of bankruptcy;
a Chapter 7, which is a total liquidation, and Chapter 13 reorganization,
where portions of the debts are repaid. So, as a result of that, the home
buying rules differ based on the type of bankruptcy filed. To buy with
a Chapter 7 Bankruptcy, you have to wait at least 24 months after the
bankruptcy has been discharged before applying for a home loan. To make
the process faster, you can try to re-establish credit with at least 4
creditors after filing bankruptcy.
Similarly, to buy with a Chapter 13 Bankruptcy, there is no other option
but to wait at least 24 months after the bankruptcy was filed before applying
for a home loan. You must pay off in full the Chapter 13 Bankruptcy before
applying for a home loan. Here also to expedite the process, you have
to put in some serious effort to re-establish credit with at least 4 creditors
after filing bankruptcy. We will here show you the way to buy a home after
bankruptcy, especially with a dismissed Chapter 7 or Chapter 13 Bankruptcy.
A dismissed bankruptcy is where the court kicked out the bankruptcy request
without further action. To buy with a dismissed Chapter 7 or Chapter 13
Bankruptcy, you must wait at least 24 months after the bankruptcy was
filed. The bankruptcy must be dismissed before applying for a home loan.
There are several ways of re-establishing credit after bankruptcy. You
can open one or more secured credit card(s), switch or ask your
gas and electric provider for your residence if they will give you a clean
credit reference letter if you pay on time for at least 12 months. Re-establishing
credit after bankruptcy is the most viable option for buying a home after
bankruptcy.
To re-establish you credit, you have to have a clean credit reference
letter from whom you generally make transactions on a monthly basis. You
can ask your auto insurance provider if they will give you a clean credit
reference letter, if you pay on time for at least 12 months. You can also
get in touch with your phone or pager service provider to ensure a clean
credit reference letter if you pay on time for at least 12 months. Similarly,
you can approach your cable TV provider and your water provider and ask
if they can give you a clean credit reference letter, provided you have
a perfect track record of paying on time for at least 12 months. You can
also buy a used car on a 12-month plan, and ask if they will give you
a clean credit reference letter if you pay on time for the term of the
loan.
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