Filing for Chapter 7 or Chapter 13 bankruptcy is sometimes the most responsible decision you can make when you are facing unsurmountable debt that you have no means of paying back. However, you may worry that if you file for bankruptcy, you will never be able to get a mortgage again. However, that is not necessarily true. There are steps you can take that may help you obtain a mortgage following a bankruptcy discharge.
Examine your credit report
One step to take after your bankruptcy has been discharged is to review your credit report. This is because sometimes mistakes are made, and a debt that was discharged will still appear on your credit report. If so, you will have to contact the credit agency to have it removed, so your credit report is clear and accurate.
Obtain a secured credit card and an installment loan
Another step to take to rebuild your credit is to show creditors you are capable of paying back loans. One way to do this is by obtaining a secured credit card. With a secured credit card, you make a deposit with the bank that issues the card, and that serves as the credit limit for the secured credit card.
Installment loans, as the name implies, are loans you take out and then make monthly payments on. This could be a personal loan or an auto loan, for example. It is important to make these monthly payments on time and in full, or it could affect your ability to qualify for a mortgage in the future.
You may be eager to get a mortgage as soon as your bankruptcy is discharged, but it is important not to do so hastily. This is because if you wait longer, for example, for two years, you may get a better interest rate and better terms on the mortgage. Plus, waiting allows you to save more for a down payment.
For many, a mortgage is possible following bankruptcy
These are only some tips for those in the Silverdale area who are pursuing a mortgage following bankruptcy. This post cannot guarantee whether you will be able to obtain a mortgage following bankruptcy. While it is a possibility for many, it is important to seek legal advice before proceeding, to increase your chances for success.