Bankruptcy is a process that people turn to when they have no other way to get out of debt. Choosing to use this option can be very helpful for regaining control of your finances. If you use this, though, you should realize the effects it may have on getting a home loan in the future, and here are several things you should understand about getting a mortgage after bankruptcy.
Bankruptcy gives you the opportunity to start over
Bankruptcy will affect many things in your life, and one of the main positive effects is the chance it can give you to start over fresh. After using any branch of bankruptcy and completing the process, you technically should be in much better financial condition. In fact, you might be left without any debts to pay at all. With no debts, you will have more cash in your hands to spend or save. The point, though, is learning how to manage your finances differently than before. If you can do this, you will not only be able to avoid falling into the debt trap again, but you might actually be able to save up a lot of money.
The three main goals you should have after bankruptcy is avoiding falling into debt, saving up money, and working on ways to improve your credit. Successfully doing these three things will help you get a mortgage loan faster.
There are timing issues to understand
Secondly, you should know that there is a time period in which you must wait to apply for a loan after using the bankruptcy process. The timing depends on the branch you used and the loan type you want to get for your loan, and a mortgage lender can help you understand these things. You will need to know the exact date in which you filed for bankruptcy, though, as this is the date important in timing a loan after bankruptcy.
You can get a loan under the right circumstances
Finally, you should know that it is very possible to get a loan to buy a house after using this process, but it is up to you to wait long enough and do what you can to improve your financial condition.
As you can see, bankruptcy is not something that will prevent you from getting a mortgage; however, it will affect when you can get a mortgage. If you would like to find out if you now qualify for a loan after using bankruptcy, talk to a mortgage services provider in your city.