If you are seeking home loans with a bankruptcy, you may be able to get approved for financing one to two years after your bankruptcy discharge date.
Establishing good credit after bankruptcy is extremely beneficial to getting approved for a home loan. The following steps will help you accomplish this goal. First, make sure to pay your bills on time. This is the most effective step bankruptcy filers can do to restore their credit rating. Next, apply and obtain one to two secured or unsecured major credit cards. Make sure to keep your balances low. Finally, keep a close tab on your credit report each month. This will help you see your progress of rebuilding your credit score. This can be accomplished by using a credit monitoring service.
When getting pre-approved with a mortgage company, they will want to see a good financial track record since your bankruptcy discharge. There are three main items a mortgage lender will look for when determining whether or not to approve your home loan. First, they will want to see a two year period of paying bills on-time. Next, they will want to see that you have saved for a down payment. Finally, a steady and reliable source of income will be required.
Finding a mortgage lender who will approve a home loan to a individual with a recently discharged bankruptcy (less than one year) and no re-established credit rating will be very difficult and would not come with good terms for the borrower. Finding home loans with a bankruptcy should be taken at a slow pace, and should only be done after you have restored your credit rating.
When buying a home, remember to shop around, to compare costs and terms, and to negotiate for the best deal. Your local newspaper and the Internet are good places to start shopping for a loan. You can usually find information both on interest rates and on points for several lenders. Since rates and points can change daily, you’ll want to check your newspaper often when shopping for a home loan. But the newspaper does not list the fees, so be sure to ask the lenders about them
Did You Know? Don’t pay any business, organization, or person who promises to prevent foreclosure or guarantees you a new mortgage. So-called “foreclosure rescue companies” claim they can help save your home, but they can’t really do that. They’re just out to make a fast buck. Some may ask for hefty fees in advance – and then, once you pay, stop returning your calls. Others may string you along before disclosing their charges. Cut off all dealings if someone insists on a fee in advance.