Buying A Home After Bankruptcy
If you have ever experienced having to go through bankruptcy then you know just how devastating it can be. One thing that you may be wondering is if you will still be able to attain a home loan. Also, not to mention the thought of buying a home after bankruptcy can still be a possibility.
Bankruptcy can make your home mortgage loan approval extremely difficult, but we at Greater Mortgage Solutions can still make it possible to get you approved for a new home loan. Not to mention bad credit does not last forever and there are loans for bad credit being accepted all the time. These type of lenders are known as Subprime lenders and they are focused on helping individuals with bad credit in attaining the home of their dreams after bankruptcy. Do keep in mind that time does have to pass after bankruptcy typically at least 1-2 years after re-establishing some credit.
There are an increasing number of people with poor credit who are searching for home financing. Here are some extremely good ideas to consider after bankruptcy to expedite your approval for a home loan.
Increase your credit rating. By simply making regular payments on time or on a regular basis, the odds of your credit score rising is high. Once your bankruptcy has ended for some time, usually about 2-3 years, you should have an easier time qualifying for a smaller interest rate for a mortgage loan.
Owning an asset. Renting a home may be a simple way of putting a roof over your head, but you are essentially throwing your monthly payments away each month. Financially it is better to buy a home because over time, the value of your home will increase, thus working your way towards owning an asset. After some time of purchasing your dream house you may be able to consolidate any other debt that your bankruptcy might of not included, you can achieve this by attaining an equity loan.
Things To Consider After Bankruptcy
It can be extremely tempting to purchase an new home, vehicle, or to perform renovations after bankruptcy discharge since you have no debt left. Due to the financial relief that you had, you may probably feel like you can afford a larger house payment. Let me tell you that it is not that easy so I have provided some things to consider before you obligate yourself to a new mortgage payment.
The Pre-payment Penalty. This penalty lasts about 6 months worth of house payments, and usually lasts anywhere from 2-3 years. Upon signing those mortgage documents you need to make those payments on time, on a timely basis. Making those payments on a timely basis is crucial to prevent you from losing the house. So we suggest to have extra funds available for incidentals that you may need in the future
The Two Year Mark. After 2-3 years from the date of the bankruptcy discharge, mortgage loans will be much easier to attain. With a small down payment, you might even be able to get a mortgage loan without a pre-payment penalty. If you are close to the 2 year mark we advice to wait it and have more mortgage loan options.
Borrowing Too Much. Don’t spend more than you can afford. This mistake tends to be the most common that we usually get into. When deciding to buy a house, purchase one that you know you can afford. Avoid maxing out your credit or living on the edge of your income.