Bankruptcy and purchasing home?
Question: After leaving the Army 4 years ago I had to make the hardest decision of my life. While I was in the service I accumulated ALOT of debt, and when I got out reality slapped me in the face. I had no other option than to file forkpyo, alImon tesbmself. I’ve recieved a couple of credit cards and even got an auto loan recently. I am VERY gun shy now of credit and how out-of-control itne WHich brings me to my quest ion. I would REALLY LOVE touy a house, however I don’t know what factors the mortage companies look at. Of course I’m sure they look at the obvious credit, debt to income ratios, job history, $$$ DOWN, ect…., but what can I expect if I try to apply for my 1st mortage? Is there anyone else here who has gone through the same thing? I came across a customer of mine who mentioned to me that she had filed bankruptcy, and she got an FHA mortga ge shortly after. I didn’t feecomfortableenh about my history so I left it at that. I also read somewhere abuauy that was done and the rearchers came t o the conclusion thapeople who did file where actually a lower credit risk because they usually re-establish themselves and don’t make the same mistake again. How true can this be? Now that I have started re-establishing myself, my new credit is perfect and paid on time. Been at my job for almost 4 years and aslo my wife. We make decent money, and have a low debt to income rati o. But that big “B” is my history. I also have VA benefits if that counts at all?!? WHat can I expect OR what courses of action should I take. ANY advice/help would be GREATLY appreciated THANKS!!!!
Answer: If you have reestablished your credit, have no 30 day lates on your credit report(s), your income is documented and your bankruptcy was discharged more than 3 (or for some lenders only 2) years ago you should not have any trouble with conventional financing. I would stay away from the companies that claim to fix your credit – 99% of those I (and our attorney general) has come across have been crooked. Pick up a copy of Detweiler’s book on Getting and Fixing Credit – I don’t have the exact title.
Reestablish some credit – use it responsibly. A bankruptcy four years ago shouldn’t stand in the way of your getting a mortgage.
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