Bankruptcy And Buying A House - Is It Smart To Buy

Each year, millions of people file bankruptcy as a means of erasing their consumer debts. While this approach may relieve stress, a bankruptcy is damaging, and will hang over your head for the next ten years. Still, it is possible to overcome bankruptcy. The key is making smarter financial and credit decisions. With this said, some people choose to purchase a home after a bankruptcy. Here are a few pointers to consider when buying a home.

Reasons to Delay the Buying Process after Bankruptcy

If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is a black cloud that looms over your credit report.

When any prospective lender reviews your report, they will be notified of your recent or past bankruptcy. In some instances, this justifies an immediate denial. On the other hand, there are lenders eager to help you establish or rebuild your credit. Thus, they will approve a loan request. Nonetheless, the penalties are steep.

Higher mortgage rates can be anticipated when purchasing a home after bankruptcy, especially if you have not established other credit accounts. Mortgage lenders consider two factors: credit scores and credit reports.

Although a bankruptcy appears on your credit report, having a high credit score will increase your odds of getting a comparable rate. Unfortunately, if you buy immediately following a bankruptcy, you will not have the opportunity to boost your score.

Reasons to Buy a Home after Bankruptcy

Lenders will approve mortgage loan applications one day following a discharge. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit. Moreover, it is the quickest way to increase your credit score.

After a bankruptcy, the average person has a credit score below 600. Good credit consist of credit scores 650 and above. Maintaining current mortgage payments will gradually increase your score. After two years of regular payments, you will have established a good payment history. Hence, you may qualify for a low rate refinancing, which may lower your mortgage payments.

Posted by Daniel R. Portillo on December 13, 2008 at 12:00 AM

About Daniel R. Portillo
Daniel R. Portillo is affliated with Prudential California Realty, which is located in Pasadena, CA. For further assistance please use the contact information located on the right.

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Local Information for Pasadena, CA

Latitude: 34.156098 -- Longitude: -118.131808

ZIP Codes for Pasadena, California	91101 91102 91103 91104 91105 91106 91107 91108 91109 91110 91114 91115 91116 91117 91118 91121 91123 91124 91125 91126 91129 91131 91175 91182 91184 91185 91186 91187 91188 91189 91191
Area Code for Pasadena, California	626
Time zone for Pasadena, California	PST

Other Area Cities: Alhambra, CA Altadena, CA Arcadia, CA Azusa, CA Baldwin Park, CA Burbank, CA Glendale, CA La Canada Flintridge, CA La Crescenta, CA Los Angeles, CA Monrovia, CA San Marino, CA Bradbury, CA Montrose, CA Pomona, CA Rosemead, CA Sierra Madre, CA South Pasadena, CA Pasadena, CA West Covina, CA Duarte, CA

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Pasadena is a city in Los Angeles County, California, United States. As of the 2000 census, the city population was 133,936. The California Finance Department estimates the Pasadena population to be 146,166 in 2005. Pasadena is the main population and cultural center of the San Gabriel Valley. It is the 6th largest city in Los Angeles County and famous for hosting the annual Rose Bowl football game and Tournament of Roses Parade. The popularity of the region drew numbers from across the country, and Pasadena eventually became a key stop along the Atchison, Topeka and Santa Fe Railway, which led to an explosion in its growth. From the real estate boom of the 1880's until the Great Depression, as great tourist hotels were developed in the city, Pasadena became a winter resort for wealthy Easterners. -- Source: Wikipedia.com

California 2000 Census Population Profile Map

	Pasadena	California	United States
Population	133,936	33,871,648	281,421,906
Median age	34.5	33.3	35.3
Median age for Male	33	32.2	34
Median age for Female	36	34.4	36.5
Households	51,844	11,502,870	105,480,101
Household population	130,418	33,051,894	273,643,273
Average household size	2.52	2.87	2.59
Families	29,858	7,920,049	71,787,347
Average family size	3.3	3.43	3.14
Housing units	54,132	12,214,549	115,904,641
Occupied units	51,844	11,502,870	105,480,101
Vacant units	2,288	711,679	10,424,540

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Bankruptcy And Buying A House - Is It Smart To Buy

Local Information for Pasadena, CA

Latitude: 34.156098 -- Longitude: -118.131808

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