| Buying a home with bad credit is possible with the | | | | accurate. After a bankruptcy, creditors may leave |
| help of a subprime lender even if you have a | | | | open accounts, even when they should be closed. |
| recent bankruptcy or foreclosure. These | | | | These open accounts can have a negative impact |
| mortgage lenders specialize in financing home loans | | | | on your credit score. |
| for people with poor credit. | | | | Appeal To Mortgage Lenders |
| Effect Of Bankruptcies And Foreclosures On | | | | To appeal to mortgage lenders with a bad credit |
| Credit | | | | history, increase your down payment and cash |
| A bankruptcy or foreclosure is not the death of | | | | reserves. A large down payment ensures that the |
| your credit. Yes, your credit score will be hurt and | | | | mortgage company will receive at least a partial |
| you won't be able to borrow from a traditional | | | | return on their investment if they have to |
| mortgage lender right away, but you still have | | | | foreclose. A FICO score of 580 will require at |
| options. | | | | least a 5% down payment, and lower scores will |
| A bankruptcy or foreclosure signals a crisis in | | | | require a larger down payment. |
| finances. Lenders understand this, and if there are | | | | Cash reserves ensure that the borrower has |
| mitigating circumstances, such as a healthcare | | | | enough resources to weather a temporary |
| emergency or loss of a job, they will make | | | | financial emergency. Mortgage lenders like to see |
| exceptions. | | | | at least two months worth of payments in a |
| Minimize Your Bankruptcy Or Foreclosure | | | | savings account, but a higher amount will only help |
| To minimize the effect of your bankruptcy or | | | | your application. |
| foreclosure, include a one-page letter in your | | | | Online Mortgage Brokers |
| credit report stating the reasons for the financial | | | | Online mortgage brokers also make it easier to |
| crisis. Lenders want to know that this was a | | | | find financing for people with adverse credit. |
| one-time event, not a sign of financial | | | | Through their websites, you can compare multiple |
| irresponsibility. | | | | finance offers from different lenders, ensuring |
| While including the letter in your credit report, | | | | you get the best rates and terms to buy a home. |
| review all your accounts and be sure they are | | | | |