While nobody likes to admit defeat, sometimes throwing in the towel is the thing to do. Roswell residents who worry that they cannot buy a home after filing for bankruptcy can relax. It will take some time and some work, but you can still achieve the dream of homeownership.
Realtor.com explains that you can expect your credit score to take a hit, but rebuilding your credit and getting a home loan is certainly something you can realize. Once your bankruptcy is final, take these actions to begin repairing your credit.
Your first task is to get a copy of your credit report from the “big three” credit reporting agencies, TransUnion, Experian and Equifax. Look for mistakes and any instances that show you still owe a debt and ask them to correct these entries.
Obtain a secured credit card. Because it limits you to what is already in your bank account, there is little risk for a bank in issuing it. Set up an account with direct deposit of your paycheck to get started. Use it like a debit card to pay for everyday items. This helps you establish a record of payments.
Next, work to get an installment loan from a car dealer, furniture warehouse or another business. You will likely pay a heavy interest rate, so choose something small to start with, a few thousand dollars that you can pay off over several months. This shows other banks that they can trust you to pay back a loan. Here are some additional tips:
- Do not overspend. Keep purchases small and never exceed what you know you can pay back.
- Make your payments on time. This goes for utility, insurance and other payments, too.
- Stay with your job to show banks that you are dependable.
Do not apply for a mortgage for the first few years following a bankruptcy. If you were to apply and be approved for a home loan, your interest rate is likely to be sky-high, and 30 years is too long to pay a too-expensive mortgage.
Open a savings account and contribute regularly. Do the same with a retirement account, such as a 401 (k). After a few years of savings and on-time payments, you will look more attractive to banks and stand a much better chance of being approved for a mortgage loan.
The information in this article is of a general nature and is not meant to be taken as legal advice.