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If you think that bankruptcy is going to be a permanent black mark on your credit report, then you are mistaken. Bankruptcy remains on your credit report for a period of 7-10 years and even during this duration you can apply for mortgage say lawyers of Dallas based bankruptcy law firm Recovery Law Group. If you are looking for applying for mortgage loans, here are some things that can help you:
Re-establish Credit
It takes a lot of time to rebuild your credit and you need to be patient during the process. Once you are through with a bankruptcy, the first step you should take is to get a credit card, preferably a secured one. In such cards, you need to put some money as collateral which serves as a limit for that card. Once you become accustomed to paying bills on time and spending within the limit, you can opt for an unsecured credit card. You can use credit cards to buy things that you can need and can afford to pay for at the end of the month. In a nutshell, you need to treat your credit card like your debit card in order to improve your credit score.
Building your credit history is vital if you wish to improve your chances of getting a mortgage. To do this you need to make efforts using various credit cards. Once this is done you might find it easier to get a personal loan or car loan debt too.
- Getting Mortgage
The minimum waiting period for people who wish to take a mortgage to get a new house is one year after bankruptcy discharge or dismissal. However, the time taken in getting mortgage depends on the type of bankruptcy as well as the loan you wish to get.
- FHA Loans
An excellent mortgage option after bankruptcy! In the case of Chapter 7 or Chapter 11 bankruptcy, the bankruptcy discharge or dismissal should have taken place 2 years before the application of loan. In the case of chapter 13, the duration is 1 year.
- VA Loans
If you are looking for this loan for your mortgage, you need to wait 2 years in case of chapter 7 or Chapter 11 bankruptcy, while there is no waiting period in case of Chapter 13 bankruptcy.
- Conventional Loans
These types of loans offer an advantage over FHA loans, the mortgage insurance is removed after 20% equity in your home is reached. However, it is not easy to procure a conventional loan post-bankruptcy. in the case of chapter 7 or chapter 11 bankruptcy, the dismissal should have taken place at least 4 years back.
In the case of chapter 13, the waiting period depends on discharge or dismissal of the case:
- If it was discharged, you need to wait 4 years from the filing date and 2 years from the discharge date to apply for this loan.
- If the bankruptcy was dismissed, you can apply for conventional loan 4 years after dismissal.
Being careful and working towards your goal will get you the desired results. Having the assistance of bankruptcy lawyers can be an asset in this case. In case you haven’t hired one, you can call at 888-297-6023 to discuss your case with experienced bankruptcy attorneys.