Reference -
Chapter 13 Bankruptcy: How It Affects
Your Home
There is no doubt that filing chapter 13 bankruptcy will affect your
mortgage, but the question is what will it do? When you file, it will
remain on your credit report for up to ten years. During that time,
every time that you apply for any credit, from a home mortgage to a car
loan to a simple credit card, the lender will see this on your credit
report and will then need to decide if in fact they should give you
credit. In many cases, the answer will be no. When it comes to
purchasing a home, this large commitment may be that much harder to get.
Options For Individuals
But, there are options for many people who are in chapter 13
bankruptcy or have found themselves with the ability to pay for a
mortgage but have this black mark on their credit history. Buying home
when you are in this situation will be tricky. Here are some tips to
help you through.
· There are lenders willing to work with individuals who are capable
of paying their mortgage on time. Although you have this black mark on
your history, some lenders will still work with you if you have a good
history of steady income. Unlike a credit card, people are often more
aware that they need to pay their home payments before anything else
because it only takes one behind payment to get into foreclosure.
Lenders realize this and some will offer payments to individuals in this
situation.
· Do anything and everything you can to build your credit history.
Yes, you have bankruptcy on it, but you still need to insure that you
are a good risk. One way to do this is to make your payments on time.
This is very important to lenders. If you have a car payment, make sure
that you pay it on time every month. The same goes with any credit cards
you may have.
· Work on your credit score. To improve your credit score, you’ll
need to work hard. Pay off as many of the debts that you still have
because this will improve your credit to debt ratio, a big number for
lenders. Another thing that you can consider is getting a credit card.
Now, you will find that these are very costly, but having just one that
you pay off completely every month can really help you to re-establish
your credit worthiness. Relief will then come in from lenders who see
that you have pulled yourself together again.
Refinancing
What about getting refinancing mortgage while in chapter 13? This is
often a difficult thing as well. For many individuals, refinancing is
just what they need. Here’s why. Refinancing re-starts your loan so to
speak. So, if you have been paying on it for five years, it will
lengthen the loan back to the original number of years but in turn, the
payments for your mortgage are lowered. This can really make a huge
difference for individuals who need the money monthly. You’ll find that
lenders in NH and various other locations do just this for you. There
are many companies willing to work with those who are in chapter 13
bankruptcy.
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