Even though some shady credit repair services might try to convince you otherwise, a bankruptcy filing does not cast a dark shadow over your creditworthiness for the rest of your life. All the restrictions that bankruptcy imposes on your financial choices eventually go away, at least in theory. 

The bankruptcy filing eventually disappears from your credit report. You eventually become eligible to file for bankruptcy again. Rebuilding your creditworthiness after a bankruptcy filing requires patience and strategy. Unless you suffer another financial catastrophe like the one that led to your first bankruptcy filing, you will eventually get to the point where you can borrow large amounts. 

Even for people who have never filed for bankruptcy before, the road to qualifying for a home mortgage is long and arduous. For help strategizing about preparing to apply for a home mortgage loan while a bankruptcy filing is still visible on your credit report, contact an Oakland Chapter 13 bankruptcy lawyer.

Applying for a Home Mortgage Loan With an Unimpressive Credit Score

Conventional wisdom holds that you cannot get a home mortgage loan unless your credit score is at least 700 because otherwise, the interest rates will be so high that the monthly payments will be unaffordable. In fact, there are also other factors that determine how affordable a home mortgage is in the long term and whether you can afford to keep up with the monthly payments in the near future, which are two different questions.

Your credit score affects the amount that lenders are willing to lend, as well as the interest rate on the mortgage loan. A considerable number of homeowners had credit scores between 670 and 699 when they applied for mortgages on their current homes. Some of these homeowners have had bankruptcy filings in the past. Mortgage lenders have the right to set rules about how long you must wait after a bankruptcy filing before you apply for a home mortgage; most require you to wait somewhere between one and four years.

To raise your credit score before you apply for a mortgage loan, subscribe to a rent reporting service if your landlord does not already have a subscription to one. This way, your credit score will improve a little bit each time you pay your monthly rent on time. Likewise, you should borrow only as much as you need, so save as much money as you can for a down payment and choose a modestly priced house or condominium if one is available.

If the mortgage you can get leaves you with a high interest rate, focus on paying down your debts after you buy the house so you can further improve your credit score. Eventually, you may be able to refinance for a lower interest rate.

Contact the Law Office of Melanie Tavare About Qualifying for a Home Mortgage

A debt relief lawyer can help you strategize about affordable homeownership if you have previously filed for bankruptcy. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.