Is Buying a House After Filing Bankruptcy Really a Thing?
Find Out How You Can Buy a House After Bankruptcy
The short answer to whether you can buy a house after filing bankruptcy is YES. It is totally a thing to buy a house after filing as long as you are able to meet the lender’s criteria for approval.
At Financial Freedom Legal we recognize that being able to buy a home is a top priority for many people in their journey to financial freedom.
We provide our clients with the information they will need to help rebuild their credit; we ensure that our clients are informed about the Federal Housing Administration (FHA) guidelines regarding home buying after bankruptcy; and we connect our clients with our community partners who can help them find a home and obtain approval for a mortgage loan.
So, here’s the tea on home buying after filing bankruptcy!
Rebuilding Credit
Raising your credit score is the first step to improving your ability to qualify for a home mortgage. FHA guidelines require a minimum credit score of 500 to be approved for a mortgage loan.
However, in order to be approved for a mortgage loan with a low down-payment, you will need a credit score of at least 580.
Obtaining a secured credit card after filing bankruptcy can be an excellent way to begin re-establishing your credit. Be sure to use your secured credit card each month, avoid using more than 30% of the available credit, and pay off your credit card balance every month.
Waiting Requirements After Chapter 7
FHA guidelines require that you wait at least one year after receiving a chapter 7 bankruptcy discharge before you can qualify for a home mortgage.
Even after waiting that one-year period, you must be able to demonstrate that there were extenuating circumstances outside of your control that caused you to need to file bankruptcy.
In the absence of extenuating circumstances, FHA guidelines would require you to instead wait two years from the time you receive a chapter 7 bankruptcy discharge before you can qualify for a home loan.
In addition to the waiting period requirements, other criteria that must be met include: re-establishing good credit, not incurring new credit obligations, and showing that the events that led to your bankruptcy filing are not likely to occur again based on your current situation.
Waiting Requirements After Chapter 13
FHA guidelines require that you make at least 12 months of plan payments in a chapter 13 bankruptcy before you can qualify for a home mortgage.
You must also prove that all bankruptcy payments were made on-time, that you have re-established good credit, and that the events leading to your bankruptcy filing are not likely to occur again based on your current situation.
Bankruptcy court permission is also required to finance a home while you are in chapter 13 bankruptcy. But, don’t worry, Financial Freedom Legal will take care of that part for you.
Our Community Partners
Financial Freedom Legal has partners in the real estate and mortgage community that can help you purchase your home after a bankruptcy filing!
We will connect you with people who are familiar with the bankruptcy process, knowledgeable about the real estate and mortgage industries, and share in Financial Freedom Legal’s goal of helping you reach financial freedom!
Join us on July 22nd from 12 p.m. to 2 p.m. for a Home Buying and Credit Building event. Our partners mortgage loan officer Marlon White, and real estate agent Jennifer Cox will share their knowledge on home buying, mortgage loan approval and building back your credit after financial struggles. Our event includes food and games. It’s fun and informative for the whole family. Give us a call at 804 373 3366 for the event address.
That concludes this week’s Bankruptcy Tea with Steve and Vee. Please do not hesitate to contact us for additional information. We can be reached anytime at 804-FREEDOM! We would love to hear from you!
