If you have recently completed a Tampa bankruptcy case, congratulations! No really, you have taken a huge step towards securing your financial future free from the burden of bad debts. Although you may not know it yet, you do have a chance at borrowing again; even for a home purchase. However, don’t apply for that mortgage just yet. Take the time to prepare yourself for the future in borrowing.
Slow and Steady
The process of rebuilding after a bankruptcy or foreclosure takes time. Chances are your credit has taken a hit from years of missed payments and delinquent account standings. Your first step towards a mortgage loan is small, manageable lines of unsecured credit. This means waiting on the big loan and starting small. Look for a low interest rate line of credit, which often comes with a reduced spending limit. That is ok! Your goal right now isn’t making convenient purchases, rather establishing a new history of responsible borrowing. Keep your balance below 50 percent of the available limit and pay off the card after a month or two. Make another reasonable purchase and pay it off again. Keep up this pattern for at least six months, and then look into additional lines of credit. It can take a year or more to rewrite your new credit history, remember to be patient.
If you are bouncing back after a Chapter 13 bankruptcy, it is important to keep all of your paperwork. Having a paper trail of your prior financial profile and your newly established polished credit profile is the best way to begin seeking a mortgage loan. You may also want to write up a letter of financial hardship explaining your prior trouble with debt. If you experienced the death of a primary provider, medical illness or job loss, keep those records to help demonstrate your unforeseen problems with prior debt. You can also request letters of verification from your recent creditors, documenting your responsible borrowing history in order to help your future mortgage lender obtain an understanding of your potential as a borrower.