Bankruptcy can discharge many debts and can lead to the fresh financial start you need moving forward. However, one concern many who file for bankruptcy have is whether they can ever get a mortgage again. Homeownership is important to many in the Owensboro area. Fortunately, while it may take time, it is possible to obtain a mortgage following a bankruptcy discharge. The following are some steps to take before applying for a mortgage after bankruptcy.
Monitor your credit report
It is true that a bankruptcy filing will lower your credit score. A credit score can impact the interest rate on a home loan. Three credit agencies are required by law to provide you with a copy of your credit report at no cost each year. If you note any errors on your credit report, you can take action to remedy them by contacting the reporting agency and contesting the error. It is also important to ensure your bankruptcy discharge shows up on your credit report.
Improve your credit score
There are several ways you can start to improve your credit score following bankruptcy. For example, having a secured credit card that you make payments to in full and on time can improve your credit score. Taking out a small personal loan and paying it back quickly can also improve your credit score. Paying rent on time and keeping a savings account can also help, as can making sure any checks you write do not bounce.
You may not enjoy your job, but if you want to obtain a mortgage after bankruptcy, you may want to keep the same job you had prior to the bankruptcy filing. This shows lenders that you can be trusted and that you have a secure source of income to pay back a mortgage.
Getting a mortgage after bankruptcy is possible
For many people, by staying responsible financially and with some patience, obtaining a mortgage post-bankruptcy is possible. However, this post cannot guarantee any specific outcome when it comes to obtaining a mortgage following bankruptcy. Those who want to learn more about how bankruptcy can affect their ability to obtain a mortgage in the future may want to consult with a bankruptcy attorney in Owensboro for further information.