Purchasing a home after bankruptcy may seem out of reach. However, all hope is not lost. If you recently filed for bankruptcy and wish to purchase a home in the future, there are certain steps you can take to speed up the process.
Step One: Keep an Eye on your Finances
If someone has just completed bankruptcy, he or she is going to soon discover that the free credit report is a lifesaver. It is an easy way to keep a close eye on your finances, ensuring that all debts have been discharged and that no additional liabilities are out there. After all, no one wants to be surprised at the last minute, especially right before trying to purchase a home. Make it a regular practice to get a credit report reviewed annually to ensure that progress is being made and that your credit score is going up rather than down. In addition, prepare a budget and keep to that limit to ensure that all monthly expenses are paid in a timely manner.
Step Two: Grow a Savings Account
One recommendation financial advisors almost always make is to pay yourself first, meaning that when you create a budget, enough money is taken out of every paycheck and put into savings in the event it is needed for an emergency at a later date or for larger purchases down the road. This can be done through an automatic savings account method meaning money immediately is transferred from one account to another automatically before you have a chance to access it.
Step Three: Develop a Plan
Come into the situation with a plan in mind. Survey what the home prices are for the area in which you wish to buy. See what home values are and what these will be for monthly payments. Calculate what you can afford, based on your budget. Schedule an inspection to ensure that you are not purchasing a home that is going to be a money pit requiring multiple renovations at a later date.
Step Four: Organize the Documents Needed
Odds are if the person wanting to purchase the home has recently filed for bankruptcy, he or she knows what it takes to get all of the required financial documents put together. It can take a lot of time, so why not begin the process now if you anticipate purchasing a home soon? Organize all financial records, including pay information, paystubs or taxes. Make sure that tax records are easily accessible, as well as bank, credit card or loan statements, legal documents, such as the bankruptcy documents, and insurance documents.
Step Five: Shop Around
It is important that you research all of the options out there and shop around for the best one available. The first way to go about this is to figure out what type of loan is needed, whether it be an Federal Housing Administration (FHA) loan or one offered through a private bank. You will need to discuss these options with the lender and find the option that fits best, and it may not always be the easiest or first option. It does help to go into the meeting prepared, knowing what types of loans are out there before making any decisions.
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If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.