Many people dream of owning a home. However, the responsibilities of homeownership are extensive and need to be undertaken when you’re financially stable.
If you’re going through bankruptcy right now, you may still hold onto the hope of owning a home one day. When is it realistic to try to purchase a home? And is it even really advisable to do so?
A recent article from the New York Times looks at your ability to obtain a mortgage after bankruptcy.
Generally, after discharging your debts under bankruptcy (and, for Chapter 13 bankruptcy, repaying them at least in part), you would need to wait before applying for a loan to buy home. The period of time you would need to wait varies – depending, for example, on whether you’re going to the Federal Housing Administration for a loan versus a private company.
But even if you wind up qualifying for a loan, ask yourself if purchasing a house will really be the best idea for you, soon after bankruptcy.
- The terms of your loan may be unfavorable.
- Even after going through bankruptcy, you could still have mounting expenses you need to deal with (and this would include the new expenses of homeownership – repaying the mortgage, property taxes, maintenance, etc.)
- You may not have enough in savings to cushion you in the event of another financial disaster such as a medical crisis or job loss.
As suggested in the article, your best bet might be to rent for a while, as this can also help you rebuild your credit score (assuming you’re paying your rent on time, along with any other payments you’re obliged to make).
To discuss this further, please contact a Troy, Ohio bankruptcy attorney if you live in Ohio. Your bankruptcy attorney will be able to give you advice about how to rebuild your life after bankruptcy, and that includes possibly purchasing a home.