| Experienced bankruptcy lately? You may wonder | | | | car, do some renovations, etc., after |
| if you will still be able to get a home loan. | | | | bankruptcy discharge you have no debt left. |
| You may also be wondering if buying a home | | | | You will probably feel like you can afford a |
| after bankruptcy is a good idea for you. | | | | larger house payment due to the financial |
| | | | experience that you have had. |
| While bankruptcy can make your mortgage loan | | | | |
| approval difficult, it is still possible to | | | | But it is not that easy so here are some |
| get approved. In fact there have been more | | | | factors to consider before committing |
| and more bad credit loans coming out all the | | | | yourself to a new house payment. |
| time. | | | | |
| | | | The Pre-payment penalty. This penalty is |
| They are called the Subprime lenders; they | | | | usually about 6 months worth of house |
| are focusing more on helping individuals with | | | | payments. And usually lasts from 2-3years. |
| poor credit in buying homes after bankruptcy. | | | | Once you sign those mortgage papers you |
| | | | absolutely have to make those payments. If |
| This is happening mostly because bankruptcies | | | | you don't have the amount of the pre-payment |
| are still on the rise and there is an | | | | penalty in savings, you are locked into |
| increasing number of people with bad credit | | | | making the payments or losing the house. |
| who are looking for home financing. | | | | |
| | | | The Two Year Mark. Keep in mind that after |
| Just to give you a bit of an overview here | | | | 2-3 years from the date of the bankruptcy |
| are some very good reasons to consider after | | | | discharge, mortgage loans will be much easier |
| bankruptcy and when you are looking to buying | | | | to get. With a small down payment, you might |
| a home: | | | | even be able to get a mortgage loan without a |
| | | | pre-payment penalty. |
| Increase your credit rating. When you make | | | | |
| your payments on a regular basis, you will be | | | | So, if you are within 6 months or so from the |
| able to develop your credit rating. Once your | | | | 2 year mark it would be smart to wait it out |
| pre-payment penalty is done, you should be | | | | and have more mortgage loan options. |
| able to refinance your credit loan for a much | | | | |
| lesser interest rate. | | | | Borrowing Too Much. This is the most common |
| | | | mistake that we usually get into. If you do |
| After your bankruptcy has been ended 2-3 | | | | decide to buy a house, buy one that you know |
| years, you ought to have a much easier time | | | | you will be able to afford. Don't max |
| qualifying for a lesser interest rate | | | | yourself out on credit, living right up to |
| mortgage loan. | | | | the edge of your income. |
| | | | |
| You will be able to own an asset. If you are | | | | If your income suddenly drops, you'll want to |
| just renting a home then you are absolutely | | | | make sure that you can still afford your |
| throwing your monthly payments away. Why not | | | | house payment. Be conservative with how much |
| just buy a home and over time its value will | | | | home you need to buy. Most of us always think |
| increase and you are working your way towards | | | | that bankruptcy is the end of our credit |
| owing an asset. | | | | life. But do not despair because I know some |
| | | | people that have been in to bankruptcy that |
| Once you have bought your house as soon as 6 | | | | have been able to get up again and rebuild |
| months or so later you should be able to take | | | | their credit quickly and most of them have |
| out an equity loan on your home and | | | | even been able to buy a new house. |
| consolidate any other debt that you might | | | | |
| have since your bankruptcy or debt that could | | | | Bankruptcy will show up on your credit report |
| not be included in your bankruptcy. | | | | for 10 years. That means that every mortgage |
| | | | lender will certainly see that fact when |
| Taxes and student loans will not be | | | | evaluating your mortgage application. |
| discharged in a bankruptcy. You may also want | | | | |
| to use the extra cash to invest in a business | | | | Although it may be difficult to find a bank |
| venture or for needed home improvement. | | | | to give you a mortgage it's certainly not |
| | | | impossible. Banks want to make money and you |
| It is very tempting to buy a new home, new | | | | may find one that's willing to take the risk. |