Home Mortgage Loans After Bankruptcy - Financing A Home After Bankruptcy
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Home Mortgage Loans After Bankruptcy: Financing A Home Successfully
Summary
Financing a home following bankruptcy doesn't have to be challenging. By choosing the right lender, you can secure reasonable mortgage rates. With time and financial strategy, you can enhance your loan application. Even with a bankruptcy on your credit report, achieving conventional rates is possible depending on your financial status.
Lenders Specializing in Post-Bankruptcy Cases
After a recent bankruptcy, subprime lenders can help you obtain home financing. Once your bankruptcy is finalized, you’re eligible to apply for a mortgage. Initially, expect rates about 12% higher than conventional ones unless you possess substantial cash assets.
Two years post-bankruptcy, conventional lenders might consider your application. While the bankruptcy will appear on your record for years, lenders prioritize your current payment history and debt-to-income ratio.
Tips for Improving Your Loan Application
While you can't erase a bankruptcy, you can enhance your application to secure better rates. Down payments ranging from 20% to 50% are an effective strategy for obtaining lower rates. Additionally, maintaining cash reserves for two months or more is beneficial.
Consider opting for an adjustable-rate mortgage to qualify for more funding at temporarily lower rates. Shorter loan terms can also reduce rates. You have the option to lower your rate further by buying points, but you may find it more advantageous to increase your down payment and refinance after your credit improves.
Research Lenders Before Committing
Invest time in researching loan estimates to save significantly on your future home loan. Ensure consistency in the numbers and terms used when comparing quotes from different lenders for accurate comparisons.
Once you've selected a lender, the most challenging part is complete. You can complete your loan application online in under ten minutes, and your loan contract will be sent for your review shortly, with funds to follow soon thereafter.
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