If you absolutely had to file for bankruptcy in Utah, it’s what you had to do. You discharged your unsecured debts. Great. They’re gone and you have a fresh start. So now you want to purchase a house.
After bankruptcy, you are off to a fresh start but that does not mean that you can stand there idly and declare to yourself, “Finally, I owe no one nothing” (you are still not free from bad credit, though). Go over your credit history and be sure all the debts have been eliminated. If you spot any overdue account, report it to the credit bureau. Acquire a copy of the discharge letter from the courthouse or your attorney, that will serve as your proof.
What does a mortgage lender really think about having about seeing a bankruptcy on your credit report in general?
It’s kind of the worst thing that you can do to your credit report and it is going to take your score way, way down. And by score, I do mean Fico score. It’s that little three-digit number that runs from 300 to 850. So chances are after the bankruptcy it is going to be down toward that 300 mark.
Well, that’s not a problem it’s because you couldn’t rebuild. In fact, it takes about 24 months to really get that score back up to the point where a mortgage lender is going to say, you’re fabulous, we want to have you with a customer. In the meantime, what you need to do is start saving for a down payment because if you have a bankruptcy, then you’re not going to look so hot to a lender just because it’s sort of a sign of financial irresponsibility.
So score some cash because they’re really good and want to see it. You’re going to want to put down at least 20 percent as a down payment in general. Also, during that time, get a credit card, start to use it, but use it really responsibly because time does heal the wounds of a fico score slashing. However, you can make a lot of changes just by using credit in the meantime really, really well. So go out there, use credit, build your score back up and buy a house. Here is a breakdown of what you need to do:
Rebuild Your Credit
Start by rebuilding your credit. This will take time and effort, but I’m telling you, it is worth it. Obtain secured credit cards, these types of credit cards have monthly credit limit depending on the amount you deposit on the issuing bank. You can also get yourself into installment loans. As both of these will report directly to credit bureaus. And be sure you pay on time.
No Late Payments
On all obligations you have: credit cards, loans, utility bills, etc. be sure you pay on time and be sure you pay the right amount. This is the purpose of opening the credit cards and installment loans. You will want to rewrite your credit report with on-time payments and no overdue accounts for the next one or two years. The document also those payments, as they will also be required soon when you get a new house.
In the course of rebuilding your credit, start saving everything you can. Since you are preparing to get a new house, you need to be ready for the down payment. Some will require a minimum of 3% to 10% for a purchase, but some lenders will ask for a hefty 20% to even 35% front money. Remember, the bigger the deposit you make, the less obstruction you will meet from mortgage companies.
Apply For a Mortgage
After a year or two of rebuilding your credit, with the help of a mortgage officer, apply for a mortgage. Provide the proof of discharge you obtained, a proof of employment, and bank statements (reflecting your savings for the down payment) for the application process. As these will provide proof and bearing that you worked hard to reestablish your credit after bankruptcy, you will be able to get a home loan. Be advised that interest rates might be higher and loan terms not as advantageous, but it is a start. If done properly, you may be able to get a mortgage two years after your bankruptcy is discharged.
About Salt Lake City, Utah
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Poplar Grove, The Avenues, Ballpark, Lower Avenues, Downtown, Woodbury, Central City, Neighborhood House, Salt Lake City Community Development, Rio Grande, The Neighborhood Hive, Neighborhood Services, University Neighborhood Partners, Salt Lake City, Neighborhood Auto Service, Sunnyside Park, Building at Rear, 537 West 200 South, Washington Square Park, Area 51, Brigham Young Historic Park
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Reviews for Ascent Law LLC Salt Lake City, Utah
We've gotten divorce and child custody work from Ascent Law since the beginning because of my ex. We love this divorce firm! Staff is gentle, friendly and skilled. Tanya knows her stuff. Nicole is good and Ryan is fun. Really, all the staff here are careful, kind and flexible. They always answer all my questions, explain what they're doing and provide great legal services. I personally think they are the best for divorce in Utah.
I have had an excellent experience with Ascent Law, Michael Reed is an absolutely incredible attorney. He is 100% honest and straight forward through the entire legal process of things, he also has a wonderful approach to helping better understand certain agreements, rights, and legal standing of matters, to where it was easy to know whats going on the entire process. I appreciate the competency, genuine effort put forth, and assistance I received from Ascent and attorney Michael Reed, and I will be calling these guys if ever I have the need again for their legal assistance! 5star review Wonderful attorneys!
This review is well deserved for Ryan and Josh. New clients should know they are worth the 5 star rating we give them. We needed 2 sessions from them because of the complexity of the matter, but they are both very passionate about his helping others in need. My sister needed bankruptcy and I needed divorce. Sometimes they go hand in hand but a large shout out to this team - also Nicole is one of the sweetest people you ever did meet - she offered me warm cookies!
Mike Anderson and his colleagues & staff are knowledgeable, attentive and caring. In a difficult and complex case that eventually went to trial, Mike was the voice of reason and the confidence I needed. His courtroom abilities are amazing and I felt his defense of me was incredible. His quick thinking and expertise allowed for a positive result when I felt the World was crumbling. His compassion, after the case, has helped me return to a good life. I trust Mike and his staff. They are friendly and very good at what they do.
I worked with Attorney Alex and Paralegal Ami in my divorce case. I got to know the team very well over the course of two years. I cannot think of a better team to have worked with. Ami and Alex are not only exceptional law professions who are very knowledgeable and thorough, they are also the best human beings who empathize with the emotions I was experiencing. Alex was conscious of my budget and worked efficiently to try to reduce unnecessary legal expenses. My case also involved some dealings with a foreign country that Alex and his team had previously dealt with. They did an amazing job addressing cultural barriers in a very respectful manner and did not fall short in quality of work or in standards when dealing with some of these new challenges. Ami deserves a medal for being extremely professional, calming, and compassionate when it is needed most. When you need family law attorneys, call this firm. I now feel I can move forward with grace and dignity.