Some of the most common questions I answer are about mortgages and bankruptcy. You can obtain a mortgage after completion of your bankruptcy. Bankruptcy is used as a factor to determine your creditworthiness and your ability to pay the mortgage you are applying for. Other factors remain relevant such as good credit, sufficient stable income, ability to put a down payment. Lenders are also likely to want you to wait a couple of years or more after you have received a discharge in your bankruptcy.
You should approach obtaining a mortgage by starting with the basics. Is it a good idea for you to purchase a home?
This is how I would approach trying to obtain a mortgage after completing bankruptcy:
1- Does buying a house make sense for me and my family? Is it likely for the property that I would like to buy to appreciate?
2- Do I have at least 20% to put down? Having a sizeable down payment often makes good sense. It lowers your monthly payment, it makes it easier for you to qualify, and you pay less interest payments.
3- Can you afford the monthly payment? I don't think your monthly payment should be more than 40% of your net household income.
4- Do you have any savings in the event of an unforeseen event like job loss or illness?
If you have just completed bankurptcy, you probably don't have 20% to put down. You should wait. The longer you wait, the easier it becomes for you qualify. Buying a home is an important financial decision that deserves planning and contemplation. Save 20% down payment, maintain a stable work history, make sure you can afford the property you want to purchase, and I am confident you will be able to obtain a mortgage within 2-3 years of completion of your bankruptcy.
Mortgages and bankruptcy aren't often thought of as possible but the longer you wait the easier it gets.
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