Bad Credit’S 3 Ugly Stepchildren And How They Impact Home Buying
Do You Have Full Custody of Bad Credit?
Foreclosure, bankruptcy, and credit card problems: if you have bad credit you probably belong to one or more of those three categories. All of them can hurt you if you are trying to buy a house, but you might be surprised at what is possible even if you belong to one or more of these categories.
Foreclosure
Buying a house after a foreclosure is possible. You must wait at least three years from the date that you give up ownership of the house in order to qualify for a mortgage on a new house. It takes longer than three years to qualify for some types of mortgages, but there are good mortgages available at the three year point. After three years the bankruptcy doesn’t stop you, but your credit still must be good enough. Usually if you’ve been through a foreclosure your credit is not good. More on what to do about that later in this article.
Bankruptcy
One full year after your bankruptcy has been discharged (the end of the bankruptcy process) you can qualify for a good mortgage and buy a home. This is only if you have good credit and if you just went through a bankruptcy its unlikely that your credit is good. It is never too soon to start improving your credit so you can buy a house. You can even begin while you are still in the bankruptcy process. Read on to see how.
Past Credit Card Troubles
Many, many people get into trouble with credit cards when they are young and have to deal with the consequences for many years. Past due credit cards can prevent you from buying a house unless you deal with them in the proper way. It is usually possible to negotiate with your credit card issuer and only pay a fraction of the total amount owed. Sometimes you can even get them to remove the item from your credit file.
Fixing Your Credit so You Can Buy a House is Not “One Size Fits All”
Repairing your credit to the point where you can qualify for an excellent government-insured loan (the only type of loan we recommend) requires specialized knowledge depending on which of the above three categories you belong to. Also, be sure to find training specifically geared towards helping you buy a home. Above all, be sure you find someone to help. Good luck!
About the Author
Matt MacLanders is the owner of AmericaOwns, the site where he offers his bad credit home ownership training. He has been a principal in more than 200 real estate transactions. He is a licensed real estate agent in the state of North Carolina. In the past, he has worked as a risk management specialist for a major accounting firm. He has experience helping people get qualified for houses.
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