Do you ever wonder if you can still buy a home after bankruptcy? Yes, it is possible. Even after the bankruptcy discharge, you can still be entitled to buy a new house. You just have to rebuild your credit score first, then apply for a home mortgage at the right timing.
Bankruptcy gives you a lot of options for debt settlement. It can wipe out or eliminate some or all of your debts. You will have the opportunity to have a fresh start and enjoy a debt-free life. However, bankruptcy can stay on your credit report for a certain period and it can damage your credit history. This will have a great effect on your ability to qualify for credit or loans such as a new home mortgage, car loan, or credit card. Bankruptcy will reflect on your credit record for up to ten years, depending on the type of bankruptcy chapter that you have filed. However, you don’t have to wait for ten years before you can apply for a new mortgage.
In Oregon, purchasing a home after bankruptcy is possible as long as you have a strategic financial plan and determination. It is crucial to monitor your credit report at all times to avoid any errors. Although your credit score is greatly affected by the bankruptcy, you can still rebuild it by using secured installment loans and credit cards. You just have to make sure that all your loan debts will be paid in full and on time according to the repayment plan.
Here are some tips before you buy a house after a bankruptcy discharge:
Aim for bankruptcy discharge
Monitor your credit report
Ensure accuracy of the information on your credit report
Before you qualify for any type of loan or mortgage, your bankruptcy should be discharged first. A bankruptcy discharge is issued by the bankruptcy court to free you from the responsibility of paying off qualifying debts and forbids your creditors to collect any of your debts or liabilities that are already discharged. You may seek legal help from a competent Oregon bankruptcy lawyer to guide you on how to increase your chances of being discharged from bankruptcy.
Monitor your Credit Report
A credit report is a detailed record of your credit history to measure your creditworthiness. You need to ensure that the details on your credit report are updated and accurate. Furthermore, you are eligible to get one free credit report yearly from one of the “big three” credit rating agencies. Instead of a one-time request, you may stagger it quarterly. In this way, you will be able to monitor your credit report regularly within a year.
When you check your credit report, you need to watch out for any debts that are already paid off and discharged. In Oregon, the law prohibits a creditor to consider any discharged debt in bankruptcy as presently owed, outstanding, late, converted to a different debt type, or having a balance due. If you see any mistakes similar to these, make sure to report them immediately to your credit agency to have them modified and corrected.
Ensure Accuracy of Information on Your Credit Report
You need to cross-check and ensure that all the personal and financial account information written on your credit report are true and accurate such as:
Personal information (your name, address, or Social security number)
Account information (to avoid identity theft)
Information relevant to your former spouse that should not be included in your report
Correct annotations for all your closed bank accounts
Any account that is not included in your bankruptcy filing listed as part of it
Rebuild and Improve your Credit Score
When you apply for a mortgage, you need to gain the trust of lenders. To prove your ability to pay your debts, on time according to the repayment plan is a must. You may start repairing your credit score through the use of secured credit cards and secured installment loans.
Secured credit cards are backed by the money that you have on your savings account as the collateral for the cards’ credit lines. You will be given a certain credit limit amount depending on your past credit history and the amount of money that you have in your account.
Installment loan is a type of loan that obliges you to make monthly regular payments that include the principal loan amount and interest rate. Personal loans or auto loans are some of the examples of installment loans. If you cannot catch up on your due dates, it will negatively affect your credit. Before you apply for any of these installment loans, you need to be certain that you can repay the debt.
As you rebuild and repair your credit, it is advisable to consult a qualified Oregon bankruptcy lawyer to help you along with the process. If you want to improve and maintain a good credit score, it is crucial to ensure that all payments are made on time. In case of missed monthly payments, your creditor will take money from your savings account and reduce your credit limit. All activities on a secured credit card are reported to credit agencies.
Applying for a home mortgage doesn’t have to be done in a hurry. It is advisable to wait for at least two years after the bankruptcy discharge before you qualify for a new home mortgage. When you file a loan at the right time, you will have higher chances of getting better loan terms and interest rates. Always remember that a difference in the interest rate can have a great effect on your monthly mortgage payment and the total amount of your house.
The Role of Oregon Bankruptcy Lawyers
Buying a house after bankruptcy is possible; however, you need to be patient, dedicated, and careful in financial planning and rebuilding credit. It is crucial to monitor your credit report regularly to qualify for a new housing mortgage. For legal help, do not hesitate to consult our reliable Oregon bankruptcy attorneys at Northwest Debt Relief Law Firm. Our lawyers will guide you on how to get a loan with the best mortgage terms and purchase a new house after bankruptcy.