CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Buying a Home after Bankruptcy

Buying A Home After Bankruptcy In Tampa, St Petersburg, And Pasco Florida.Getting a Mortgage After Bankruptcy

Many people assume buying a home after filing for bankruptcy is impossible. As a matter of fact, some people postpone or fail to file at all because of this fear. They opt not to use a valuable tool that could actually make it easier for them to achieve their financial goals in the future all because they mistakenly believe filing for bankruptcy prevents homeownership.

The truth is filing for bankruptcy is sometimes the only option for someone struggling financially. Many mortgage lenders understand this and would rather see a person take control of their finances than continue to ignore the problem.

It is possible to buy a home after bankruptcy, but there are several things you need to understand in order to carefully navigate mortgage lending in the wake of filing.

What should you know if you’re considering bankruptcy or you’ve already filed and you’d like to buy a home someday?

How Bankruptcy Chapters Affect Mortgage Borrowing

Most individual consumers file for either Chapter 7 or Chapter 13 bankruptcy. Often, the decision to file for one or the other is based solely on whether the filer owns a home at the time of filing.

In most cases, mortgage lenders tend to view Chapter 13 more favorably because they are paying back at least a portion of their debts. They might also be working to remain in their homes as they get the rest of their finances in order.

It is possible for those who have filed for Chapter 7 to buy a home, but it might be more challenging than if you’d filed for Chapter 13. If you’d like to own a home one day, make sure you mention this to your bankruptcy attorney before filing.

Filing Can Increase Your Timeline

It’s important after working through bankruptcy to not rush into borrowing money immediately. You want to rebuild your credit, but it’s also important to make smart choices you can handle. Mortgage lenders typically require a waiting period after filing for bankruptcy to better increase the odds a person has truly gotten back on his or her financial feet.

In most cases, you’ll need to wait two years after bankruptcy before your application will be considered by a mortgage lender. Some mortgage lenders prefer there be a four year period between bankruptcy and application. The important thing to know when you begin to consider home ownership is that you might need to wait – and that’s perfectly fine. There’s plenty you can do during that period of time to better prepare yourself for owning a home.

Checking Your Credit

Credit is an important part of buying a home and chances are if you filed for bankruptcy yours is less than ideal. Bankruptcies remain on your credit report for up to a decade, so if you plan to buy a home within that period of time the mortgage lender will be well aware of the fact that you filed.

Despite knowing your credit is less than perfect, it’s still important to review your credit reports before you file for a mortgage. Yes, the bankruptcy will be there, but you want to make sure there are no errors that could further harm your chances of being approved for a mortgage. Errors are especially common after filing for bankruptcy, so make sure everything that was supposed to be discharged or otherwise dealt with is in order.

For more information about reviewing your credit reports, check out this information from the Consumer Financial Protection Bureau.

Be Open and Honest

The best thing you can do as you embark on the mortgage application process is to be upfront about your financial history with the lender. Most require a letter explaining why you filed for bankruptcy. Mortgage lenders understand that difficult financial times aren’t necessarily an indication that someone is careless or irresponsible with their money.

The best thing you can do is be honest about what happened and provide proof that there were extenuating circumstances, such as medical bills, severance paperwork, divorce decrees, etc.

Focus on Preparing to Buy a Home

It might seem like a long wait to buy a home after filing for bankruptcy, but this gives you plenty of time to save money for a down payment and put together a financial cushion to protect yourself if things don’t work out as planned.

In general, these seven steps can help you prepare for home buying after bankruptcy:

  1. Understand how your type of bankruptcy affects home buying and determine if there are any waiting periods
  2. Check your credit
  3. Start saving for a sizeable down payment
  4. Calculate what mortgage payment you can afford each month
  5. Stick to your budget
  6. Research lending programs that might help make a mortgage more affordable
  7. Beware of scams designed to take advantage of vulnerable borrowers

To learn more or to discuss what you can do to improve your chances of one day owning a home after bankruptcy, contact the Law Office of Robert M. Geller at 813-254-5696.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

What Happens If My Spouse Dies During Bankruptcy?

Seniors declaring bankruptcy have many concerns. One of the most pressing is how their health or their spouse’s health might...
Read More

Can I File for Bankruptcy Without a Job?

Bankruptcy is often considered a tool used by people without money, without income, and without any financial hope. The truth...
Read More

Should I Use Retirement Savings to Avoid Bankruptcy? A Tampa Bankruptcy Lawyer Can Help You Protect Your Retirement Nest Egg

Withdrawing money from your retirement savings is rarely advised by financial experts, even if you are facing bankruptcy. Working with...
Read More

Can You File for Bankruptcy and Keep Your Home

Foreclosure is something that occurs after a homeowner has missed multiple mortgage payments. Working with a Florida bankruptcy attorney helps...
Read More

Is There Such a Thing as Mortgage Bankruptcy?

Your home is one of your primary concerns when filing for bankruptcy. Can you claim bankruptcy and keep your home?...
Read More

What Do You Need to Know about a Home Auction in Bankruptcy?

Home auctions are a common topic that arises when someone is faced with the prospect of bankruptcy. Bankruptcy protection for...
Read More

Can a Florida Bankruptcy Attorney Help Me Avoid Eviction

Losing one’s home is one of the most common concerns you can have when filing for bankruptcy. A Florida bankruptcy...
Read More

Covid-19 Tax Tips

The COVID-19 pandemic has affected a variety of things including taxes. These COVID tax tips can help you prepare and...
Read More

How Can a Bankruptcy Attorney in Tampa Florida Help Me If I Fall Behind on My Mortgage After Filing for Bankruptcy?

Many people find that filing for bankruptcy provides all of the financial relief they need to get back on track....
Read More

Are Bankruptcy Laws Designed to “Trip” You Up? Here’s How a Bankruptcy Law Firm Can Help You Avoid Trouble

It’s no surprise that people are skeptical of how bankruptcy can help their financial situation. Many have heard stories about...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions