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Home financing after chapter 7: what to expect

Getting a home loan can be a difficult process, and home financing after Chapter 7 bankruptcy can be especially challenging. However, it isn't impossible to get a home mortgage after filing for a bankruptcy.

Home financing after chapter 7Getting a home loan can be a difficult process, and home financing after Chapter 7 bankruptcy can be especially challenging. However, it isn't impossible to get a home mortgage after filing for a bankruptcy. 

If you're considering home financing after Chapter 7 bankruptcy, you should ensure that your bankruptcy has been discharged. If you're still in the process of declaring bankruptcy or if you're still working with a credit counseling agency, you won't be able to get a mortgage. In fact, most banks won't even consider giving you a home loan until 24 months after your bankruptcy has been discharged.

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If you're still in the process of bankruptcy or if your bankruptcy has only recently been discharged, you may be able to get a home using an alternative financing option. One of the most popular options is seller financing, which is sometimes referred to as rent to own. In this type of arrangement, you make payments directly to the person who owns the home. By doing this, you bypass the banks, and you may be able to get a home without applying for a traditional mortgage.

If at least 24 months has passed since your bankruptcy has been discharged and you want to get a traditional mortgage, you should prepare to apply for one from a bank. Ideally, your first step should be ensuring that your credit report is clean. If you've incurred any bills since your bankruptcy, you should pay them and make sure that the credit bureau is reporting them as paid. You may also want to have a loan adviser check your credit report for any blemishes. If everything is in order, you can simply apply for your mortgage. You won't have to tell the bank you're applying for home financing after Chapter 7, as it will already be on your credit report. 

If your credit score is too low to qualify for a mortgage, you may want to take a few steps to improve it. Satisfactorily repaying a credit card or a loan is one of the most effective ways to raise your credit score. If possible, you should take out a credit card and repay the entire balance each month. You may even want to get an installment loan to boost your score. If you have trouble getting either of these loans, you may want to find a friend or relative to cosign for you.

Home financing after chapter 7 bankruptcy isn't impossible. However, you should keep in mind that the process may take longer than usual. With a bit of patience and possibly some help from a cosigner, you should eventually be able to get a home. If you want to compare national mortgage lenders now, click here to go to Reply!

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