Personal bankruptcy became an option in Croatia in 2016. It was introduced to give eligible Croatian citizens the opportunity to reschedule debts, as it also allowed creditors the chance to balance claims. If you’ve filed for personal bankruptcy in Croatia, you may be wondering how your bankruptcy filing will impact your ability to purchase real estate in Croatia in the future. This guide will pinpoint the impact of a personal bankruptcy claim, as well as some modern options for getting on the property ladder.
Start by rebuilding your credit rating
Protecting yourself during bankruptcy is essential and one of the ways to do so is to begin to rebuild your credit. This will help you to prepare for purchasing Croatian real estate down the line. The first step that you should take is to access a credit card which is secured. This form of credit card is secured via the cash in a savings account. Cash savings act as collateral for the card’s line of credit. Make timely payments on your secured credit card to improve your credit score.
You may also take out an installment loan, such as a car loan or personal loan, and make timely payments on it. It goes without saying that you should not overextend yourself when it comes to accessing credit. If your goal is to boost your personal credit score, with a mind to getting an affordable mortgage loan down the line, you must be cautious. Take on only as much debt as you can afford to repay right on time. When you do repay on time, it will be the easiest way to rebuild your credit rating. Putting good credit after bad doesn’t happen overnight, but it does happen. Stick to timely repayment plans to get back on track financially.
Decide how much house you can afford
When you’ve raised your credit rating by making payments on time, you will be ready to move forward, by deciding exactly how much house (or condo) you can afford. It’s important to avoid being “house poor”. Home ownership comes with plenty of hidden expenses, beyond the cost of a mortgage. There are other expenses to factor in, including insurance, home maintenance and the cost of utilities. This just scratches the surface. Use online mortgage calculators to see how much you can afford to pay for a home, based on your preferred mortgage amortization period and your personal income. Once you’ve established what you can afford, you may begin to house hunt. Once you’ve found an appealing property, it will be time to shop around for a mortgage loan.
Shop for an affordable mortgage loan
When you apply for a mortgage, you’ll need to complete a loan application, present your passport, provide proof of your income with pay stubs, include an assessment for the value of the property in question and provide proof that you carry mortgage insurance. Before you apply, you should compare mortgage loan providers. Look at their interest rates and other loan conditions carefully. Shopping around for the lowest rate of interest is very important. Once you’ve reviewed the options, apply to one or a few mortgage loan providers and hope for the best.
Buying real estate after bankruptcy is possible
Bankruptcy has a downside. It makes it difficult for those who file bankruptcy to access credit that’s affordable. When you take steps to repair your credit, you will build a strong foundation for the future. After your credit rating rises, you may begin deciding how much house you can afford, and then shop around for a good mortgage loan.
Author: Jacqueline Burns