How Do I Buy a Home After a Bankruptcy?
How do I buy a home after a bankruptcy?
What are the long term effects on my credit?
There is never a problem buying a home with cash no matter what your credit rating or history shows. The challenge comes when attempting to get a loan. Private loans are available but come with a higher interest rate and additional costs. Conventional mortgages have become more available, but the new guidelines are a bit vague and the consensus is that it may take 4 years after your discharge, assuming you have maintained good credit, to be approved.
One interesting fact that just came to my attention is; if you have filed bankruptcy but your home's lender had not previously filed a foreclosure suit against you (meaning that you filed bankruptcy due to other debt or as a preemptive move) and you have surrendered the property in the bankruptcy, as opposed to the lender foreclosing and taking back the title or sells at auction, the foreclosure does not show up on your credit report. Having this foresight is key since this strategy can reset the clock on your credit repair.
If your lender had filed a foreclosure suit against you prior to your filing for bankruptcy then it may show up on your credit report and you may need to contact the lender directly and ask them to remove the foreclosure action from your credit report. If it does show up as a foreclosure on your report then it could have an effect of up to 7 years related to getting a new home loan.