Post Bankruptcy Mortgage Loan |
By Barry Davis |
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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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