Is There A Home Mortgage After Bankruptcy

Bankruptcy has become an epidemic that is affecting many families. Between the years 2002 and 2003 there were an estimated 1.6 million families in the United States that filed for bankruptcy. This is a rise of 150,000 across the nation. Changes in bankruptcy laws have done nothing to slow down the epidemic as bankruptcies in 2008 will be well over one million. So how do you qualify for a mortgage after bankruptcy

If you have filed for bankruptcy then you are all too familiar with the difficulties you encounter afterwards when you try to gain credit approval in order to qualify for a mortgage. When you file for bankruptcy it remains a part of your credit history and will show up on your credit report for a period of 10 years. Many lenders are not willing to take a chance on a person who was bankrupt because of the high risk and damaged credit. As well, obtaining a competitive interest rate is often next to impossible. However there are lenders who specialize in the field of bad credit and loans for those who were bankrupt.

The good news in all of this is that qualifying for a home loan after you have gone through bankruptcy is sometimes easier to accomplish than is applying for other types of loan that require installments. There are lenders who offer high Loan-to-Value programs to those individuals who do not qualify for the traditional loans extended to those with good credit.

If a few months have passed since your bankruptcy ended then it may be the time to start shopping for a mortgage. Find mortgage brokers that help with bad credit. It is important that you are very thorough in your search for the right mortgage broker. Remember that your situation is unique and your past credit problems will play an integral role in the mortgage you are able to qualify for. With that said, do not allow yourself to become discouraged. Be patient but refuse to give up!

When you do find a mortgage broker who seems like he or she could be a good fit for you and one who understands your financial situation, make sure that you bring a copy of your bankruptcy discharge papers with you. The mortgage broker will need to verify that you have been discharged before further steps towards a mortgage can be taken.

Before you think about looking for a mortgage, after you have finished with bankruptcy you need to begin re-establishing your credit to reflect the good. One method of doing this is to obtain a secured credit card. What this means is that you establish your own credit limit by providing the funds that you will use as credit. Use the credit but make sure that you pay the balance in full every month. This helps put you back on the path of a responsible credit user.

Another important thing you must do following your bankruptcy is request a copy of your credit report. Look it over carefully to ensure that all of the negatives against you in the report are accurate and reported properly. Please note that some of your creditors may not have noted their accounts when your bankruptcy was put through and these accounts could still show up as open and uncomplimentary to you. This needs to be fixed without delay!
When you are accepted for a mortgage after bankruptcy it is imperative that you do not make any late payments. This also holds true for your secured credit card or any type of credit you might have. Late payments will work against you in terms of getting a mortgage so don’t let it happen!

There are mortgage lenders around who are proficient at providing bankruptcy buyouts in order to make sure that all payments are made to trustees as per the bankruptcy agreement. These kinds of loans take the form of short-term loans that allow you to start down the road of rebuilding credit and get you walking down a more secure financial path.  One example of this is a FHA loan. This type of loan can work to buy out a bankruptcy that is a Chapter 13, as long as it as been opened for a period of 12 months. All payments must be made on time and the rest of your credit must be favorable to qualify you.