Bankruptcy has proven to be a very terrible reality when considering the purchase of a home in the near future. If you have unfortunately filed for bankruptcy, the immediate question on your mind would be whether to apply for another home loan to buy a home. Although bankruptcy can greatly ruin and taint your credit report, there is still a chance that you will apply for and be approved for a home loan.
However, it is imperative to be aware of the different effects of this type of financial statement on your credit report. The record will go into your credit history and will definitely stay there for up to ten long years. This is the reason why before you file and file for bankruptcy, you should carefully think through your decision many times before finalizing everything.
For credit reports that are already tainted with declared bankruptcy, the very normal consequence would be difficulty obtaining another loan in the future. Although you may still be able to get one, it is very important to note that the difficulty level and the chances of passing are minimal. The reason for this is that most banks or loan companies already assume that if you have a bankruptcy record, you are a big liability or risk in the first place.
When planning to buy a home, the first thing you should do is check and evaluate your credit report, especially for errors. In recent years, the federal government has uncovered countless instances of credit reporting errors that make a significant difference to a person’s credit report. Therefore, borrowers are encouraged to check their credit score every 12 months to ensure the accuracy of their copy.
So it’s important to rebuild your credit to reassure mortgage lenders that you’re already eligible for the loan and that you won’t be a liability to them. It is your responsibility to show lenders that you can move beyond your poor financial history. To rebuild your credit, you can start by getting a credit card that is basically secured by an account deposit. It’s good liquid collateral that can support your ratings.
Bankruptcy means that you are not yet allowed to apply or apply for another mortgage loan. At most loan companies, you are given anywhere from 18 months to two years before the court handling your bankruptcy will release you. In addition, the government’s Federal Housing Administration will duly recognize your credit, which will be restored after a couple of years have passed.
Bankruptcy is an unpleasant and deteriorating reality facing most homeowners in the midst of the global financial crisis. The modern trend of things makes it difficult for homeowners to get through the bankruptcy cycle. However, if you have been a victim of it, you still have the power to turn your misfortune around by rebuilding your credit and regaining your financial stability.