Yes, you can get a new mortgage loan or refinance after bankruptcy but it will take some patience and planning. Most lenders suggest you wait at least two to three or sometimes four years after your bankruptcy discharge to get into a new home loan. There are several options for post-bankruptcy home buyers such as FHA and VA loans, USDA loans and conventional loans.
FHA and VA loans are available two years after the date of a Chapter 7 discharge or after 12 months of timely payments on a Chapter 13 bankruptcy. Bankruptcy court approval is necessary to get the loan and you must explain the bankruptcy in the process. USDA loans require a three-year wait from a Chapter 7 and the same 12 months of timely Chapter 13 payments, with court approval. The conventional loans are four and two year waiting periods after Chapter 7 and 13 respectively.
Use the waiting time to get your new financial habits and savings in order.
Right after bankruptcy you may feel like the pressure is off and there may be disposable income for the first time in a while. Of course, there is a tendency to want to spend that extra money on the things you could not buy or do when under financial pressure before bankruptcy. Go ahead and splurge for a little while then pull in the purse strings and prepare to get credit worthy.
Take steps to establish your good credit habits. Start with a budget of all fixed monthly expenses and make a plan for how income will be spent every month. The most important thing you can do after a bankruptcy is not to get into any new unnecessary debt. It can take time to get used to living without things you do not really need and you may learn to really appreciate not feeling the stress of needing so many extras. Even buying more groceries and cooking from home instead of eating out is a habit that can save lots of money for future uses.
Money saving habits are contagious and good habits tend to spread.
Saving money is a habit, and it can be tough to learn. An easy way to save is to tuck money way automatically without being able to spend it. Open a savings account at your bank or credit union and set up an automatic online transfer of some amount of money to pull from your checking account right on or after payday deposits. You can also go to your human resources department to find out how easy an automatic withholding can be taken from your paycheck and directed to your savings.
Saving money and watching it grow is rewarding. When you start seeing lower interest rates, frequently paid bills and savings growing you may just keep trimming expenses and taking steps to increase income and savings. The fruits of our efforts help keep us motivated to be financially successful. In addition to saving money and avoiding further debt, credit management is necessary because you will need to qualify for a new mortgage like anyone else.
Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’sFacebook page and Follow Joseph Wrobel. Ltd. onTwitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.
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