Around one and half to two years after your bankruptcy is discharged, you will likely be able to qualify for a home loan again. You must make sure to begin improving your credit long before you are considering buying a home, but once your credit is back in shape and a little time has passed you will be ready to begin looking again. A huge obstacle to getting into a house after bankruptcy is coming up with the money to close on a house. To close on a house you will have to come up with both a down payment and closing costs.
A couple of things you can do to reduce closing costs is to roll them into the loan amount or to add them into the price of the home whenever negotiating with the seller. FHA loans allow you to roll many of the closing costs into the loan, but you will need to check what your options are, because your options depend upon the loan you are seeking to use. If you want to consider adding the closing costs to the sell price of the home, the home must appraise for more than the sell price. Then just make sure that the contract states that the seller will be contributing the extra towards closing.
If you’re moving into a house that needs repairs, you can also ask the seller to contribute additional money towards closing to cover the amount of repairs. For instance, if there is air conditioner maintenance needed, you can ask the seller to add the cost of the maintenance to their contribution towards closing.
Another strategy is to close at the end of a month. The amount of property taxes you pay at closing are calculated on a daily rate dependent upon the number of days left in the month in which you are closing. The fewer days that are left, the less you will have to pay.
In addition to closing costs, all loans require a down payment. The down payment is dependent upon the type of loan and the sell price of the house. For instance, FHA loans require smaller down payments which are typically around 3% – 5%. Conventional loans require a down payment slightly higher. Right now you can get a conventional loan with a minimum of a 5% down payment. Therefore, a FHA loan will usually require less money up front.
One method of getting assistance with your down payment, besides just saving (which you need to do as well), is to contact your states’ housing authority. Housing authorities usually have several programs available to assist people with down payments. These programs are usually reserved for first time home buyers or people who have recently filed for bankruptcy. You will often have to qualify for certain income limitations, so you will have to check with your agency to see exactly what you qualify for.
Texas’ housing authority is called Texas Department of Housing and Community Affairs. This organization can be found here: www.tdhca.state.tx.us . As soon as you start considering moving, you should do more research to see which of their programs you qualify for.