Everyone faces financial difficulties from time to time, and those setbacks may not exclude you from acquiring a property in the future. Here are 5 recommendations to assist you buy a house in Boise after a foreclosure or bankruptcy to help you understand how to pick yourself up and dust off.
Budget and Save
The first step for everyone on the path to homeownership is always taking account of your financial situation and budgeting carefully.
You want to get this done right away to determine how much you can save over the coming months and years for a down payment on your new house.
Once you’ve gathered all of your figures, do everything you can to stay to your budget in order to maximise your chances of closing on a new house later on. This includes avoiding major expenditures, keeping your existing job, and not opening or cancelling any bank accounts or credit cards if at all possible.
This last part sets the groundwork for our next tip.
Clean up Your Credit
Going through a foreclosure or bankruptcy creates a sizable black hole in your credit history.
Credit history is formed over time, and it will take time to rebuild it in order to erase the foreclosure or bankruptcy from the minds of lenders looking into your background when you wish to buy a house in Boise.
Order your free annual credit report and go through it very thoroughly. You want to check for any errors, tabulate any debts you may or may not remember, and get everything in working order.
Using your budget as a guide, try syphoning a little money from your intended savings to pay off any current debts and progressively bring your credit score back on track.
Research Your Loan Options
An important point that homeowners that have gone through a foreclosure or bankruptcy do not learn or fail to understand is that you are unlikely to immediately turn around and buy another house without an elongated waiting period if you’re in need of a mortgage.
For applicants who have had a foreclosure or bankruptcy, most established mortgage lenders have required waiting periods ranging from one year to four years or more in some situations. This doesn’t have to be a terrible thing, and you should use it to unwind from the stresses of homeownership and think through your strategy.
You may find a lender that is willing to work with you right after your foreclosure or bankruptcy, but we highly advise you to go through every word of any loan documents carefully before signing on the dotted line under these circumstances.
Give Yourself a Realistic Timeline
Take a step back and consider how quickly you can get your finances in order and be ready to look at the market again, knowing that you may easily find yourself without a reputable mortgage lender for a year or more.
After you have your more immediate financial situation under control, there’s no reason to be rushing to the listings and possibly throwing your plan into disarray.
Don’t Cover up the Past
When discussing your past financial difficulties with agents and lenders, do not try to hide it from them.
You are not required to bring it up yourself, but if you are, do not lie. A lender’s pointed enquiry concerning your credit history that is answered dishonestly almost always results in your loan being refused.
Remember that being open and honest about the changes you have made is only more likely to strengthen your application.
Help When You Want to Buy a House in Boise After Bankruptcy or Foreclosure
If you’ve had a bankruptcy or foreclosure and want to buy a house in Boise, contact us today at (208)314-1350!