Can You Get a Mortgage for a Greensboro, North Carolina Home After Bankruptcy? Skip to main content

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Can You Get a Mortgage for a Greensboro, North Carolina Home After Bankruptcy?

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Bankruptcy need not be an obstacle to buying a home

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One of the primary concerns that Greensboro, North Carolina consumers have going into bankruptcy is the long-term effect on their financial future. If you’re considering using bankruptcy to get out of debt, you may worry you’ll never be able to get a mortgage. Many financial sites take a doom-and-gloom outlook on filing bankruptcy and promise it will wreck your credit for a decade. It’s just not true. Here’s why filing bankruptcy can help you get a mortgage sooner than you imagined.

If You’re Deep in Debt, You Can’t Get a Mortgage Anyway

Mortgage lenders look closely at your finances to assess whether you’re a good credit risk. Even if you have a good credit score, if you have high balances on your credit cards and other installment debt that’s pricey, such as car loans and student loans, you could be turned down for a Greensboro mortgage. Using bankruptcy, you can shed a lot of debt to put you in a more favorable position for a mortgage.

If Your Credit Score Is Falling, It Won’t Stop on Its Own

Yes, you need a healthy credit score to get a mortgage with a reasonable interest rate, but you can’t increase your FICO score if you’re drowning in debt. Most consumers considering bankruptcy have a credit score that’s on the decline because of high balances on their credit cards, late payments, and ongoing delinquency. Bankruptcy clears all this up for you so you can start to rebuild your credit.

If You File Bankruptcy, You Can Get a Mortgage Sooner Than You Know

In most cases, Greensboro consumers can be approved for a mortgage within two to three years following a bankruptcy discharge. Some lenders won’t accept recent bankruptcy filers, but there are many that will. So long as you work hard to improve your credit score after your bankruptcy and don’t take on other new debt, you could be in a good position to buy a home before you know it.

If You Want an FHA mortgage, You Must Explain Your Bankruptcy

Most bankruptcy filers experienced a major life event that negatively impacted their finances. For some it’s divorce, and for others, it might be an accident or illness that kept them out of work or an extended period of unemployment. The Federal Housing Authority (FHA) requires that you submit an explanation of your bankruptcy circumstances to qualify so be prepared to explain your financial hiccup.

If You Want a Mortgage Faster, You Need to Get Started ASAP

Greensboro consumers that want to buy a home but are stuck with debt they can’t afford may be better off filing bankruptcy, ditching the debt and then getting to work right away on rebuilding their credit. If your debt is too much to handle, it may be too hard to dig out on your own and bankruptcy may be your best route to get the fresh start you need so you can move on and buy a home.

Rebuilding Credit After Bankruptcy

After you get your bankruptcy discharge, it’s time to hit the ground running if you want to be approved for a mortgage as soon as possible. First, check your credit report for accuracy to make sure all accounts in the bankruptcy show a zero balance. Second, wait a couple of months and then apply for a secured card that accepts bankruptcy filers. Third, build cautiously when adding more credit to your file.

What Can Greensboro Bankruptcy Do for You?

Chapter 7 bankruptcy is the fastest way to shed unsecured debt like credit cards, medical bills, personal loans, some income taxes, and outstanding balances from a repossessed auto. Within three to four months, you can be done with much of your debt and have a clean financial slate to rebuild on and prepare to buy a home.

To find out more about the benefits of North Carolina bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free Greensboro bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.

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