If you’re hoping to become a homeowner, but need to file for Chapter 7 bankruptcy, you may be wondering how doing so will affect your chances of getting a mortgage. The truth is, a bankruptcy filing won’t prevent you from buying a house – however, the process will require both patience and careful planning.
Before mortgage lenders will consider your request for financing, your Chapter 7 bankruptcy must reach the point of discharge. In other words, you’ll have to wait until the court grants the order releasing you from your debts before pursuing your dreams of becoming a homeowner.
Chapter 7 bankruptcy shows up on your credit report. Mortgage lenders will only approve you for financing if you can be trusted to repay your debts, and making regular payments on an installment loan or secured credit card after filing for bankruptcy could help you buy a house sooner.
You might qualify for a mortgage in a relatively short time after obtaining your Chapter 7 bankruptcy discharge, but you may not want to apply right away. If you hold off for a couple of years and continue to work on your credit, you’ll be far more likely to get a lower interest rate and better terms.
If you’re struggling to keep the bills paid, but want to buy a house in the near future, consult with a local bankruptcy lawyer. Filing for Chapter 7 may enable you to obtain immediate relief from many of your debts. Bankruptcy gives you the opportunity to start fresh and build a solid credit score – as such, it can be a great first step on your journey to becoming a homeowner.
That said, depending upon your specific financial circumstances, Chapter 13 bankruptcy may be a better solution. An experienced bankruptcy lawyer — like the team here at the Law Office of Davis & Jones, P.C., in Salt Lake City, Utah – can help you understand all of your debt relief options and how each could affect your ability to buy a house.
Our legal team, led by bankruptcy lawyers Lee J. Davis and Tony G. Jones, have helped more than 20,000 Utah residents get out from under a mountain of debt. We’re ready to set you up with a brighter financial future, and we’d love to see you buy the house of your dreams. For a free, no-obligation consultation to discuss Utah Chapter 7 bankruptcy, contact our law firm online or give our office a call today.