7 Tips for Buying a House After Filing Bankruptcy
Bankruptcy filing is often tagged as an unpleasant cramped with various social stigmas. With bankruptcy filing you lose out on your financial standing and it becomes quite difficult to rise to your previous state again.
However a traumatic phase is not the end of life. Your financial situation may be difficult, but that does not restrict your living altogether. Thinking of buying a house just after bankruptcy may seem an impossible task altogether. But it is not! If you are prudent with handling things it may be an easy fix to your financial crisis.
Two things you need to keep in mind in this respect are:
* Be patient while handling important financial issues. Take decisions after careful consideration of various aspects.
* Time factor is an important element. Normally the time span is 2 yrs after which you can buy a house after the discharge of bankruptcy.
The issue of buying a house after filing bankruptcy involves certain basic guidelines. By following them you can have a better standing and a simplified approach. Here are top 7 tips that you can consider:
1. Clear credit reports: Having a clean credit report is very important if you want to get home loans. The lenders check your credit report before lending money for mortgage or home loans after bankruptcy. You need to indicate some proof to your lender that you are trying to fix your credit report. It indicates that you are keen on fixing your bad credit so as to get a clean report.
2. Highlight the negative sides: Request for a credit report from the three major credit bureaus. If you find any negative remarks, report them accordingly. The credit bureaus will usually need at least 6 months to update your report. If there are any discrepancies request the bureaus to amend them. This helps in improving your chances for house loans.
3. Be prudent while requesting removals: When requesting for removals never ask for more than four removals in a letter. Even after bankruptcy filing, the report mentions all the debt discharged by you.
4. Make large down payment: A large down payment serves as an aid with home loans. A minimum of 10% down payment is needed. Developing a savings habit will help you to gather the down payment amount.
5. Opt for automatic payments on bills: Automatic bill payments help you avoid defaults with payment, especially in case of loans of any kind. With automatic payments you can remain updated with your payments. If in any case there are any late payments, ensure that you pay it before it is late over 30 days.
6. Clear your debts as fast as possible: In order to buy a house after bankruptcy you need to ensure that there are no pending debts. Pay off your debts as much as possible or totally if possible. It is because your financial condition is taken into account by the lenders before they agree on mortgage.
7. Income ratio: The lender takes an account of your income and your potential monthly payments. You need to have a considerable income source in order to procure home loans.
Apart from these steps there are a few other things you need to think before you consider buying a house after bankruptcy.
* After the bankruptcy is discharged, after 2 or 3 years of that date, you would be able to get mortgage loans easily. If you are around the 6-month mark in that 2 years time it is better to wait and have many mortgage loan options as you can.
* Settle for a house that you can afford comfortably even if your conditions change. Do not opt for something for which you need to stretch your income, expenses and credits.
* A prepayment penalty accompanies a majority of subprime home loans. After signing the mortgage documents, if you do not make regular prepayment penalties, you may be in deep problems.
It is thus not an impossible task to get a house just after bankruptcy. If you are prudent on handling your finances getting a house even after bankruptcy filing will not be a dream anymore.
How to Calculate the Future Value of an Investment?
When we decided to save, the next step is to learn to invest our money. Knowing how they behave different investment instruments over time will support us to make that money work efficiently increase our wealth, we project the amount in the future by investing with a specific interest rate will support us in the decision on the best investment tool to achieve our plans.
Knowing the amount of money that we save to retire with enough capital at the end of our working lives to accumulate money for a down payment on a mortgage or car, calculate the final amount will pay for a credit and any other utility that mean know the value you will have our money in a period of time, are some utilities to know how to calculate the value of an investment in the future.
How can we calculate the future value of a quantity?
To quantify the final amount by a certain date we must know the following information:
M = Amount to invest
It is the amount we invest to achieve our goal.
i = interest per period we will invest
It refers to the collection or payment of interest that apply to our credit or investment in a period of time.
N = number of periods that will be the amount invested.
Our investments or loans will be made for certain periods: monthly, annual or otherwise, where the interest rate applied.
After learning this information and applying the following formula we can calculate the future amount to obtain an initial investment:
Formula to calculate the future value of an amount:
VF = M (1 + i) ^ n
Where:
FV = Future Value
M = Amount to invest
i = Interest
N = Number of periods
Applying this formula, the following fictitious values, would be resolved as follows:
Fictitious Values
M = 10,000
i = 10%
n = 1 year
Substituting:
Future Value = 10.000 (1 + .10) 1
= 10.000 (1.10) 1
= 10,000 (1.10)
VF = 11.000
The final value after investing 10,000 pesos for a year at an interest rate of 10% is 11,000 pesos.
To calculate the next period, the result will give the same application:
Second period:
Future Value = 11.000 (1 + .10) 1
= 11.000 (1.10) 1
= 11,000 (1.10)
VF = 12.100
And subsequently, we can perform the same operation until the number of periods we need.
If we apply the exponential function of a calculator, this operation can be performed more quickly and to a greater number of periods.
The aim of this article is to introduce you to the knowledge of one of the tools most important financial calculations that will help us properly design any economic objective over time. Seeing it put you in the right way to analyze your investments and make sound decisions about your investments and productivity adequately plan for your money. We invite you to consult an expert or directly into one of the many titles of books dedicated to teaching the fundamentals of financial management.
