Having a home mortgage requires you to demonstrate good financial standing. A healthy credit score can also improve your chances of getting the lending you need to afford a home.
Looking for a house post-bankruptcy may take some time as you consistently work to reestablish your credit score. Knowing how to prepare to afford a mortgage again can help you set goals and take control of your situation.
Strengthening your credit
Despite the impact of bankruptcy on your credit, the opportunity to financially start anew can provide just the motivation you need to follow through. Some of the things you can do to reinforce your credit score include the following:
- Know the risks of working with a credit repair company
- Proactively pay your bills
- Create a reasonable budget
- Keep credit accounts open even if you do not use them
- Review and understand your credit report
- Set short-term and long-term financial goals
Correcting credit errors
One reason why you may see an alarmingly slow improvement in your credit score is because of errors. According to Realtor, before you submit a mortgage application, thoroughly review your credit score. Verify that all of the information corroborates your financial history. If anything is amiss, immediately contact the credit agency and discuss your concerns.
If you can effectively and consistently honor your budget and you feel confident about having enough money to afford a home, applying for a mortgage post-bankruptcy may result in a positive outcome. As you anticipate taking on a new expense, reassess your budget to accommodate a mortgage. Despite the myths about bankruptcy, affording, paying for and owning a home after bankruptcy is actually quite common. Your vigilance and thoughtful planning can help you to enjoy this benefit too.