Tips For Buying A Home After Bankruptcy

At Bach Law Offices, Inc., we understand that at some of our clients will want to purchase a home again after their bankruptcy is complete. But before you start looking for a new home, you should first make sure that several things are in place.

The first thing you need to do is make sure you have enough money in your savings, including at least $1,000 saved up for emergencies and additional funds to cover four to six months of all of your household expenses.

Secondly, you will want to put down a substantial down payment so that you don’t get hit with a Private Mortgage Insurance charge because your payment is too small.

The third thing you need to know before you buy a new home is whether you can realistically afford to keep up with your mortgage payments. This means you need to calculate your immediate and future earnings, expenses, and other financial details.

If you are thinking of buying a new home after you filed for bankruptcy, stay within the following parameters:

• Your down payment should be at least 20%. This amount should not be taken from your emergency fund or your 4-6 month savings.
• Do not borrow money for the down payment.
• Get a loan at a fixed rate for no more than 15 years.
• Make sure your payment is less than 25% of your take-home pay.
• Plan for other expenses, such as homeowner’s insurance, property taxes, city taxes, water and sewer fees, and HOA dues.

Do you have more questions about purchasing a home after bankruptcy? Then give us a call at (847) 440-5998 to set up a consultation with one of our lawyers.