Filing for a bankruptcy is serious business. One simple action such as this will impact your credit rating for ten years to come. Yet, even though you may have filed for bankruptcy, there are some lenders who will still try to extend their services to you and your family.
Jumping back into the mortgage game after a bankruptcy isn\’t likely to happen under normal circumstances. Lenders like to initiate a 2-year waiting period after the date of the bankruptcy before they allow a borrower to do business with them. Some bad credit mortgage brokers can find a loan sooner, but it won\’t be without long looking and poor terms.
Proving responsibility can be done in as little as a year, so long as you can obtain a credit card that was built for consumers with poor credit. If you can pay off your credit card without a single mistake over 12-24 months, lenders will see this as a lesson learned. While some will still shun you, your prospects will open up.
Some see the two-year minimum as a period in which they can save money for a deposit. Few lenders will turn you down if you can set forth a deposit that greatly outnumbers what a normal deposit would be. Save as much money as possible for 2-3 years, and hope to get as much as 10% of the total cost of the mortgage. Some lenders might actually ask for more, considering your credit rating is likely still in shambles.
In some cases lenders will allow for someone to vouch for your credibility by cosigning a loan. In the event that you are not able to pay the mortgage loan off, the person who vouched for you will be liable. The problem is finding a cosigner willing to do such a thing. Often parents are a good choice, as even good friends might be wary of a prior bankruptcy. Even a spouse could be enough to get lender approval.
If you can settle for a high interest rate, getting a mortgage loan before the two year anniversary of your bankruptcy shouldn\’t be too difficult when following the mentioned tips. The question you must ask yourself is whether or not you are fine with paying a higher rate now, when you can save money by fixing your credit score first and then applying for the mortgage loan.
Closing Comments
Banks are very skeptical of new ventures that are risky. This is especially true in the current economy, where banks are failing often and have to make smarter decisions on who to invest in. If you can reduce risk and prove a lesson learned, you shouldn\’t have problems getting a new home loan.
Learn more on Mortgage Refinance After Bankruptcy and Mortgage After Bankruptcy Advice.
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