Many of my clients want to know if they will ever be able to buy a house after they file bankruptcy. Or they think they will have to wait 10 years. Yes, you can buy a house and no, it won’t take you 10 years.
Yes, it is true that lenders may not want to loan you money right away. But within a year or so the credit companies are filling your mailbox with credit card offers, along with solicitations from finance and car loan companies.
Mortgage companies look at 3 things when you decide to buy a house. Your FICO score, your current income, and your down payment.
With no more late payments and past due accounts, your FICO score will come back up pretty quickly over the next year or so after bankruptcy.
As to your current income, they will want to know a few things. Do you have enough money to make the mortgage payments along with your other living expenses? Did you pay your rent on time? This is important to mortgage lenders. If you paid your rent on time, you will more than likely pay your house note on time.
How much money are you willing to put down on the house? The more money you put down, the less anyone cares about your former credit score or the fact that you filed bankruptcy.
Don’t forget about other methods of buying a home without using a traditional mortgage lender, such as owner financing, wrap around mortgages, and lease purchase options.
So, if you want to get a house, you can. You may need to wait a couple of years, but it is not something you want to jump right into anyway. Owning a house is not always the best thing for you at every stage of your life. Owning a house ties you down and carries a lot of extra expenses. But rest assured, if you want a house, filing bankruptcy won’t prevent you from getting one.
Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.