Financing a home after a bankruptcy doesn’t have to be an ordeal. When
you find the right lender, you can secure reasonable rates on your
mortgage loan. You can improve your loan application with time and some
cash leverage. Depending on your financial situation, it is possible to
get conventional rates with a bankruptcy on your credit file.
Lenders Who Deal With Past Bankruptcies
With a recent bankruptcy, you can turn to sub prime lenders to obtain
financing for your home. As soon as your bankruptcy has been finalized
by the court, you can apply for a home loan. Your rates, however, will
be about 12% higher than conventional rates unless you have significant
cash assets.
After two years, conventional lenders will consider your loan
application. Even though your bankruptcy will remain on your file for several
years, lenders will be more interested in your current payment history
and debt-to-income ratio.
Tips To Improve Your Loan Application
While you can’t erase your bankruptcy, you can improve your loan
application to qualify for better rates. Down payments of 20% to 50% are the
easiest way to become eligible for lower rates. Having cash reserves
for two months or more will also help.
When it comes to terms, selecting an adjustable rate mortgage will help
you qualify for more and at temporarily lower rates. Selecting a
shorter loan period also lowers your rates. Furthermore you have the option
of buying down your rate with points. But you may be better served by
increasing your down payment and refinancing in a couple of years when
your credit improves.
Research Lenders Before You Buy
Take some time to research loan estimates before you select a lender.
It is the easiest way to save thousands on your future home loan. Make
sure that you use the same numbers and terms when you request loan
quotes from different financing companies. That way you will have precise
numbers to base your decision on.
Once you have picked a lender, the hardest part of the process is over.
In ten minutes or less, you can complete your loan application online.
Your loan contract will be delivered in a couple of days for your final
review with funds soon to follow.
Try using one of ABC Loan Guide's
Recommended After Bankruptcy Mortgage Lenders.
View our recommended lenders to Buy a Home After Bankruptcy. Also, view our recommended sources for a Free Consumer Credit Report.
