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It might seem obvious, but avoiding bankruptcy when home buying is critical to loan approval and no long waiting period. Here’s what you need to know, including some simple solutions to avoid bankruptcy.
There’s a big difference between filing a Chapter 7 and Chapter 13 bankruptcy, which can impact your ability to get a mortgage loan. Chapter 7 requires selling assets to help repay outstanding debt while keeping some essentials such as your home and car, while the court discharges unsecured debt. Chapter 13 also allows you to keep your assets, however, it’s based on a repayment plan that requires completion in a court-determined number of years. Both result in being a high-risk borrower with challenges when obtaining a loan, but Chapter 7 is generally more of a liability for lenders.
If you want to buy a home, you’ll have a much easier time without bankruptcy on your records. Some tips for avoiding filing include:
Avoiding bankruptcy when home buying is possible. Don’t get discouraged if your financial situation is less than ideal. There are mortgage options for most situations, including loan options for someone who has filed for bankruptcy. To find out what you qualify for and for programs that can help, contact the experienced and compassionate team at Midland Mortgage Corporation.