Anyone who has gone through the process of buying a home know what an exciting time is can be. For those in Maryland who face losing their home through bankruptcy, there are a number of fears and concerns surrounding the possibility of ever owning another home after a consumer bankruptcy. It is important to understand that many people emerge from bankruptcy in a vastly improved financial state, and go on to buy another home. Doing so requires attention and effort, but is an achievable goal.
The timing of events will have a great deal of influence on when an individual is eligible to pursue a new mortgage. Consumers who lose their home to foreclosure must wait a minimum of three years before seeking a government-backed home loan. Those who want to pursue a private mortgage must wait seven years.
These waiting periods begin not from the time that one’s bankruptcy is discharged, but from the date of the trustee’s sale associated with the former home. It is crucial to know this date, as this is the starting point for the required waiting period. In addition, consumers should make an effort to reestablish their credit during this time-frame, so that they are able to demonstrate a responsible use of credit when applying for a new mortgage.
With the right degree of attention and effort, Maryland residents can emerge from consumer bankruptcy in an improved position to move forward with a future home purchase. Bankruptcy offers a fresh financial start, and savvy consumers will make use of the required waiting period to save for a down payment and work on their credit ratings. By doing so, many will find that they are better prepared to purchase a home the second time around.
Source: credit.com, “How to Get a Mortgage When You’ve Been Through Financial Hell”, Scott Sheldon, April 30, 2014