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Buying a home after Chapter 7 bankruptcy

Some people may be worried that filing for bankruptcy in Florida may affect their ability to qualify for a home loan. According to Experian, one of the major credit reporting bureaus, it may be possible and profitable to purchase a home through a rent-to-own agreement. While buying a home with this type of contract may not improve a person’s credit score, it does typically allow those with issues on their credit report to become a homeowner.

SFGate.com explains that most sellers run a credit check, even if they have advertised that they accept applications from people with a bankruptcy on their report. In any case, a potential homebuyer may be better off explaining the circumstances at the outset, which may save time if there are any disqualifying factors.

A portion of the monthly rent is set aside as a down payment under a rent-to-own purchase, but the agreement also typically requires a deposit. At the end of the contract, a buyer will need to be able to find a lender to finance the remainder of the purchase price. Building credit by getting a credit card or applying for a personal or auto loan and making payments on time may improve the chances of a good interest rate.

One of the most important things a potential homebuyer can do is make sure that the current state of his or her income will support the expenses of owning a home. It is also essential to examine any rent-to-own contract carefully to ensure that there are no surprises and that the process will go smoothly.

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