Attaining homeownership is a great goal. If you have a good credit
rating, reaching this goal is easy. On the other hand, if you have a few
credit blemishes or filed a recent bankruptcy, you may have to delay
homeownership until your credit situation improves. Several lenders
specialize in bad credit mortgages, and offer loans to people after
bankruptcy. However, before accepting an offer, consider the following points.
When was the Bankruptcy Discharged?
There is no mandatory waiting period for obtaining a mortgage after
bankruptcy. Those who are eager to purchase a home may get a loan
immediately following their discharge. Unfortunately, this may not be the best
plan. Mortgage interest rates following a bankruptcy are outrageously
high, which may greatly increase your mortgage payment. In fact,
mortgage and credit experts may encourage you to wait at least 24 month before
applying for a home loan. By doing so, you have the opportunity to
receive a comparable low interest rate on your home loan.
Have You Established New Credit Accounts?
To rebuild your credit, it is important to open new credit accounts and
re-establish credit. Because of a low credit score following a
bankruptcy, some lenders, or credit card companies will be hesitant to approve
your loan request. Thus, a secured credit card may be your best option.
If applying for a secured card, you are required to provide a down
payment. For example, if you offer a $500 down payment, then your credit
limit will be $500.
After acquiring a credit card, maintain current payments. Keep balances
low, and try to payoff the balance each month. A good payment history
will increase your credit score. Soon, you will qualify for unsecured
credit cards. Try and get approved for three new credit accounts. As your
credit improves, so do your chances for getting a low rate mortgage.
Choosing a Good Mortgage Lender
Depending on your credit rating, you may get approved for either a
prime or sub prime loan. Prime mortgage loans are offered to individuals
with excellent credit. On the contrary, sub prime loans are intended for
those with lower credit scores. Prior to applying for a loan, request
an online quote from a mortgage broker. Based on your credit
information, a broker will provide multiple quotes from sub prime or prime
lenders.
View our recommended
Mortgage After Bankruptcy Lenders.
