Many people believe that having a bankruptcy on your credit report will completely destroy any chance of getting a mortgage loan. While it is true that it certainly does not help your credit, you should know that bankruptcy does not mean you will never again be able to obtain a mortgage loan. You see, even having a bankruptcy on your credit, you could even obtain a mortgage. But you might think, no, I don't think so. Well, it is true, even after bankruptcy, obtaining a mortgage loan is entirely within the realm of possibility.
If you already have a mortgage, you will be happy to find out that you could even consider refinancing that mortgage, yes even with something such as bankruptcy. Recovery is possible; however, it is not the easiest or shortest road that you will have to endure in your lifetime. It is going to be a long road and you have to work diligently to build your credit back up, refrain from obtaining more credit and once again regain the trust of lenders and creditors.
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How can you do that? Well, the first thing you must do is to create a viable budget that you and your family can live with. How do you create a budget? Well, get a piece of paper and on one side of this paper make a list of the income coming into your home each month. This means the income of each person that is bringing money into the home, as well as any other income that should be included. On the other side, make a list of your expenses. Be sure to include all expenses, such as mortgage or rent payments, car payments, insurance payments, utility payments, groceries, entertainment and other household expenses. It is extremely important that you establish a budget for your personal finances.
This is obviously the similar data that you were required to provide as part of filing for bankruptcy. After a review of this data you should be able to determine if you are living outside of your means? Is your expenditure side greater than your income side? If so, make some adjustments, eliminate things you simply don't need and cut back on things that you don't need as much of.
Now that you have created a workable budget, it is important that you make all payments on time, every single month. Do not allow yourself to make late payments at all. This is a very good way to rebuild your credit. To really speed up the process of rebuilding your credit, you will want to have one or two credit items listed. These could be your mortgage, your car or even one emergency credit card. This will help creditors see that you are indeed working to rebuild your credit and maintaining the right path to financial freedom.
You should also never rush yourself. Do not try to apply for a mortgage loan until about one to two years after your bankruptcy has been discharged. This is important; because creditors will want proof that you are indeed going along the right path, instead of digging yourself right back into the hole of debt you were once in. A mortgage after bankruptcy is possible, if you work hard to repair your credit, make all your monthly payments on time and refrain from obtaining more debt than you make in income each month.