Filing bankruptcy is the last option to get out of the Debts. However that’s not the end of game. In fact to qualify for mortgage loans after bankruptcy you need to wait for at least 2 years after your bankruptcy has been discharged. This basically widens your horizons and options. In fact if it was the Chapter 13 bankruptcy then you are eligible for a home loan provided you must have made your payments on regular basis. However it would require a court approval before getting a mortgage after bankruptcy.
First Step – Check your Credit Report
For Post Bankruptcy the credit score should improve. In fact ideally above 650 would let you approach a regular lender. However there are options for below 650 score. Sub prime lenders are dedicated to look for consumers below 650.
Second Step – Rebuild Your Credit
Credit repair is one of the renowned methods to build up on the credit. However it’s important to remember that these credit repair orbs are flybys. One needs to ensure they are heading in the right direction. Another option for rebuilding the credit history is to opt for Secured credit card. They are the most appropriate as they have the overall lowest interest and fees. Not just that if at all it turns to be unsecured you get the initial deposit back.
Third Step – Watch Your Payments
It’s certain that Post Bankruptcy one has to ensure all payments on time. As with Bankruptcy on your credit file most of the Lenders would deny or may think hundred times before giving the loan to you. It’s imperative that you have a spotless payment history for at least 2 years. This will help you to gain some positive numbers on your credit file. Avoid any unnecessary expenditure that could be delayed for some time.
Fourth Step – Consistent Income
Now that you are planning to get a mortgage loan after bankruptcy, you also need to ensure that you get consistent income. The Lender would need an assurance from you to make the regular payments Post mortgage. At times they check your income proofs to ascertain the same thing.
Fifth Step – Ready for First Payment
Try and get a large sum of money ready for the First payment. Ideal ration of down payment is of minimum 20% of the total cost. However as its not possible to collect 20% after the bankruptcy one has to ensure be ready with maximum amount. Apparently 20% down payment would omit the Private Mortgage Insurance. In fact if you are not ready with at least 10% of the down payments don’t apply for mortgage loan after bankruptcy . Wait for some time to save the money and then apply later on. There are down payment assistance programs available to make that possible for you.
Sixth Step – Opt for Options like Mortgage through Federal Housing Administration or Foreclosed Home
A loan insured by a government body like Federal Housing Administration increases the probability of getting you mortgage loan after bankruptcy at better interest rates. And foreclosed homes would also be available at cheaper prices then the new homes. On the contrary you have option of alternative lending services that have high interest rates and fees or qualify for and after bankruptcy mortgage refinance.
Other than the above mentioned options one has to be strictly focused on the Finance. Regular income and planned expenses can only make it possible for you to get a home mortgage after bankruptcy. As after Bankruptcy once you really can’t afford to have another set of late payments on our account. Considering the downfall in the market with the blockage at the money flow it becomes slightly difficult to look for this kind of option post bankruptcy. However once you have learned the lesson there is no way of looking back and making the same mistakes.