How to Use a Mortgage to Buy a Home After Going Through a Bankruptcy

Although it is sometimes a great alternative to repair your finances, the bankruptcy as well as the following discharge period can be quite challenging. Do note that it could delay things for a few years. However, a bankruptcy cannot stop you from borrowing a mortgage for purchasing a home. This article will shed light upon the process of obtaining a mortgage following bankruptcy.

Step 1: Get A Professional Credit Assessment

After your Chapter 7 or Chapter 13 bankruptcy is discharged, you must wait for a minimum of two years before you can take out a mortgage. During this period, it is best to sit down with a credit professional and obtain an assessment. Individuals as well as families who have a bankruptcy on their credit file are usually scrutinized more when they seek future loans. Thus, spend some amount of time on cleaning up your credit.

Step 2: Figure Out Your Monthly Budget

Once you get closer to purchasing a home, it may seem like a good idea to begin living off of a monthly budget, to make sure that you remain prepared for your monthly mortgage payments and do not experience shortage of cash when you must make the payment. A budget may involve just a spreadsheet with your monthly sources of income and expenses. On the other hand, you can also make use of an iPhone or Android apps, which assist in tracking the budget.

Step 3: Get Your Down Payment Saved Up

it is also important to start saving money for the down payment that will be placed on your home. The amount required will rely on several parameters such as the city you’re buying in, your home’s size, and more. in case you are not too sure regarding this, get in touch with us for more insights.

Step 4: Maintain Your Spending Discipline Until It’s Buying Time

Lastly, do note that you must be very disciplined financially between your bankruptcy discharge and your mortgage application. You must maintain your credit report to ensure that your mortgage lender has no doubts regarding your ability to pay.

Never get discouraged in case there is some work you must put in to repair your credit. With some time and effort, you can get rid of the effects of your bankruptcy and function as a happy homeowner.