Getting a mortgage after bankruptcy is difficult, and anyone who tells you otherwise is lying through their teeth. Still, mortgages are much easier to attain now than they were a couple of decades ago. There are huge factors that make getting a mortgage after bankruptcy a chore, and there are ways to overcome them.
Can You Get A Mortgage After Bankruptcy?
The first thing that you will find out is that you can’t really get a loan for 7 to 10 years, depending on what laws are in place in your location. You will have to wait a certain amount of time before banks will even consider accepting your loan application. A loan application that is submitted before those 7 years will have a 99% chance of being declined. Certain things can’t really be overcome unless you take time. This is one of them.
Another major issue that will prevent you for getting a mortgage after bankruptcy is your credit, or FICO, score. You have already had your debts forgiven (for the most part), so you need to turn a new leaf in your spending habits. You need to pay off your college debts, which are NOT forgiven when you file bankruptcy, and you will need to start paying your bills regularly. Each bill that you pay will help boost your credit score, which in turn will make getting a mortgage after bankruptcy a lot easier.
Finances that cause you to declare bankruptcy are often not stable. If you want to have a house, you need to have stability in your life. You need to have a steady, full time job, and you have to be able to say that you have had the job for at least a year. Even if you had the superb FICO score that you need in order to qualify for a mortgage after your bankruptcy, you would be placing yourself at risk of getting into debt should something happen to your job. You don’t want to end up in debt again, so it’s necessary to look for a stable job before you search for a home.
FICO score, stable job, and time aside, there is another thing that you will have to deal with when getting your first mortgage after bankruptcy. You also will face rejection from banks, since there are many banks that will immediately refuse to offer you a mortgage. Creating a list of possible mortgage lenders and banks that might accept your applications will be a must. It’s common to have to approach 5, possibly even 10, banks before you find a bank willing to give you a mortgage. Psychologically, rejection from banks can be damaging. You will need to toughen up mentally when approaching banks, too. Remember, it will take effort, but eventually, one bank or lending company will end up accepting your application.
The process of making yourself capable of getting mortgages after bankruptcy is one that is time-consuming, difficult, and worth it. With a little coaching, advice, and hard work, you can get another home. Bankruptcy never has to be the end of your home ownership dreams, nor does it even mean that you need to be permanently barred from getting a house. As long as you are prepped to reach out to local (and federal) banks, you can get a mortgage after bankruptcy when the time’s right.