Mobile, AL Law Firm Helps Bankruptcy Clients Achieve Their Dream of Home Ownership

Alabama Bankruptcy Lawyers Advise Clients Regarding Buying Homes

If you have filed for bankruptcy in the past, you may think that you will never be able to buy a house. However, bankruptcy isn’t a permanent black mark on your credit, and it is possible to buy a home after bankruptcy.

Chapter 7 Bankruptcy

You will need to wait until the judge discharges your bankruptcy before you will be able to qualify for a mortgage. If you’ve gone through Chapter 7 bankruptcy, it will be reflected on your credit and you will usually need to wait at least four years after a court discharges your bankruptcy before you can qualify for a conventional loan. In the case of a government-backed mortgage, you will usually need to wait at least three years after the bankruptcy discharge, and to qualify for a VA or FHA loan, you will need to wait at least two years.

Chapter 13 Bankruptcy

Because Chapter 13 bankruptcy is a reorganization of your debt and you are likely making scheduled payments to creditors, it is intended to have a less dramatic an effect on your credit score, but most types of loans still require a waiting period. If your bankruptcy results in a discharge, you will have to wait at least four years from the dismissal date before you can apply. If the court discharges your bankruptcy, the waiting period is typically the same as with a Chapter 7 bankruptcy.

FHA Loan a Good Option

It’s technically possible to get any type of mortgage loan after bankruptcy, but some types of loans are easier to qualify for than others. FHA loan waiting periods are typically shorter than those for other types of loans. One of the benefits of applying for an FHA loan after bankruptcy is lower credit requirements – you can buy a home with an FHA loan with a credit score of 580 points and may even qualify with a score of 500 if you can make a down payment of at least 10 percent.

Contact an Experienced Mobile, Alabama Bankruptcy Attorney

Are you wondering how bankruptcy affects buying a home? Contact the experienced bankruptcy lawyers at the Bond and Botes Law Offices online or call 1-877-581-3396 and get your questions answered today.