Is there life after bankruptcy? That's a common concern for those who are looking at it as an option or have filed for it previously. A larger concern people have is whether it's possible to get a mortgage loan if you already filed bankruptcy. Well there is good news! You can get a mortgage loan even AFTER you've filed bankruptcy. Bankruptcy hits hard and it's not easy to manage its effects. For instance, you now have a bad mark on your credit for a few years. And if you're looking for a mortgage loan, most banks you ask will want you to wait a period before they'll review you for a loan. Usually it takes about 2 years after bankruptcy kicks in. However, once you wait out that period of time, you should be able to get your financing so long as you kept up with your payments after you claimed bankruptcy. If most of your payments were on time, then you'll have a much better success rate in getting a mortgage loan. So is it possible to get a mortgage loan before the typical 2 year period? Anything is possible but it's not as easy. First they want to make sure that you are still credible as a client so your payments after bankruptcy will have to be on time. If just a few aren't on time, then you have a high chance of getting denied. The second thing they will want is money in hand. This means you will have to have some type of down payment for them. Expect to have around 5% for a down payment to hand over or else you probably won't be considered for a mortgage loan. Also, don't forget that in any case, you will always have to provide a type of income verification. Having money in hand isn't enough, the lenders want to make sure that you will continue receiving enough money to pay them off. It may seem odd that you claimed bankruptcy and they expect you to have money saved up for a down payment, but that's the nature of the game. If you don't have money saved already to hand over and you really need this mortgage loan, then you are going to have to explore all your resources. Do you trade stocks? Do you have a retirement plan you can tap into? Do you have a 401K? These are all ways to get your down payment. You can cash out your 401K and use that money to give to the lender. You can always get that money back once you have the house financed. You will most likely be able to get a 2nd mortgage loan for the full value of the house. This tactic also comes in handy if you have to borrow the money from someone you know such as siblings, parents, or friends. Use the 2nd mortgage to pay them back the amount loaned to you. Word to the wise: tell your lender if a relative gave you the money for the down payment. They actually have rules regarding where the money is coming from. If they ever find out otherwise they can consider you to be defrauding them. That's territory that you do not want to go into. Another option for getting a down payment is to use down payment assistance programs. Some programs can give you grants. This is the best money to receive because you don't have to pay them back! They may also be able to get the down payment from the seller of the house which normally is illegal. The best way to find out about these services is to ask your bank or do some research online. In the end, all hope is not lost because you filed bankruptcy. Getting a mortgage loan is a prime example that life can go on and your credit is not destroyed as many think. It just takes a little honest work and effort. |
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