Birmingham, AL Law Firm Advises Those Considering Bankruptcy

Alabama Bankruptcy Attorneys Help Debtors Get Their Financial Lives Back

Many people worry that a bankruptcy filing will prevent them from purchasing a home in the future. The truth is that bankruptcy won’t stop them from purchasing a home. In some cases, bankruptcy could be their first step on the road to home ownership, since many realtors and mortgage brokers have professional relationships with bankruptcy attorneys.

The factors that determine how soon you might be able to purchase a home after bankruptcy include:

• Type of bankruptcy. You will be able to buy a home after a chapter 7 bankruptcy, but you will have to wait at least two years. In a chapter 13 bankruptcy, a three-to-five-year repayment plan is created to consolidate your debt and the court must approve any new loans taken out during the repayment period.
• Type of mortgage. Government-guaranteed FHA, VA, and USDA loans can be the fastest way to obtain a mortgage after a recent bankruptcy since conventional loans usually require a longer waiting period.
• Credit score. Taking the proper steps to rebuild your credit after bankruptcy is critical, since your credit score will determine the interest rate you pay as well as the down payment required to buy a home.

For FHA loans, you will need a minimum credit score of 500. There is no minimum credit score required for a VA loan, although a common score for an approved loan is around 620. The USDA streamlines the application process for those with credit scores of 640 or higher. With Fannie Mae and Freddie Mac, the minimum credit score to obtain a mortgage is 620, although certain circumstances might require a score of 640 or more.

Contact an Experienced Birmingham, AL Bankruptcy Lawyer

Do you want to purchase a home, but worry that your bankruptcy will get in the way? Contact the Birmingham bankruptcy lawyers at the Bond & Botes Law Offices online or call 1-877-581-3396 to schedule your free initial consultation with an experienced Alabama bankruptcy lawyer today.