You can buy a house after bankruptcy before it drops off your credit record in seven to ten years. Rates can be reasonably low in only two years by rebuilding your credit score. Also, taking time to search for just the right loan can save you thousands on interest payments and fees. These four steps will help you find the lowest APR on mortgages for those with bankruptcy in their credit history.

Step 1 – Rebuild Your Credit

As soon as your bankruptcy is discharge, you can start raising your credit score. Start by opening a credit card account and making regular payments. Another step is to start saving for a down payment. The larger your cash reserves, the better rates you will qualify for.

Investigate your credit report too. Make sure all your accounts related to your bankruptcy are closed. Also check that your payment history information is correct. The difference of one late payment can increase your rates by a percent or more.

Step 2 – Budget For Your House Payment

Before comparing rates on home loans, look at your own budget first. Decided how much you can afford for a house payment. This number will help you decided how much of a loan you want and what type of financing.

ARMs are the easiest to qualify for with their low interest rates. However, if you plan to stay in the house for more than seven years, you may find a fixed rate mortgage can save you money on long term interest costs.

If you are unsure what type of loan you want, use a mortgage calculator to give you an idea on payment and interest costs.

Step 3 – Investigate Financing Companies

With a general idea of the type of loan you want, you can get serious about financing companies. Investigate their rates by requesting a free quote. You need only give the most basic information, not permission to look at your credit report. That way your credit score won’t be hit.

Compare the APR for the real cost of the loan. Just looking at interest rates can be misleading. Fees are where many low interest lenders make their money. Ask about penalty fees for early payment. If you plan to refinance or sell your home, you may end up paying thousands. Often these types of fees can be negotiated.

Step 4 – Apply For Your Home Loan

Don’t wait too long to apply for your home loan. Rates are unpredictable. So quotes you received two weeks ago are no longer accurate. You can get pre-approved to lock in rates.

Here are our Recommended Bad Credit Mortgage Companies Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.