Programs for home buyers with bankruptcy

Download our Road to Mortgage Ready ebook here! Open a secured line of credit. It's not likely a credit card company or bank will give you an unsecured credit line for a few years. Choose a company that reports your activity to the credit bureaus and put several hundred dollars into an account as a deposit.

Each time you use the card and make payments on time, your credit improves. Make other payments on time, like student loans or car payments. These payments help establish that you're a good credit risk. Check your credit score three months or more after the bankruptcy to verify that the accounts have all been discharged. If some that you listed on your bankruptcy show they are still open, contact your legal representative who can help you clear the problem up.

If you handled the bankruptcy action yourself, contact the company reporting the debt. Start to save considerable money to use as a down payment for buying a home just after your bankruptcy discharge. The interest rate you'll pay on a mortgage will be higher than if you had good credit.

A large down payment helps lower the monthly payment on the home. Keep all your bankruptcy papers. The lender may want to review them, along with other legal documentation, to approve your loan. Contact a Realtor or several lenders to get pre-approved for a mortgage. Mortgage pre-approval speeds the buying process when buying a home and gives you an advantage with sellers, since they know you're eligible for a mortgage.

A trusted mortgage consultant can also help you get your credit and finances on track for you. Bankruptcy doesn't mean the end of the dreams of first time home buyers to own their own property. Mortgage lenders know that financial problems can be transitory and that bankruptcy is legal solution to overwhelming financial problems.

Again, you're probably looking at a 3-to-4 year wait once you're discharged from bankruptcy before you can once again buy a home. Get on the road to owning a home with " Get Mortgage Ready. Get your free copy at the button below. And with incomes stretched tight, some homeowners may have entered a forbearance on their mortgages. This special agreement between lender and borrower gives homeowners a little breathing room, allowing them to delay or reduce mortgage payments to their lenders over a certain period of time.

This does not mean that you cannot buy a home again within those seven years. If you want to buy a house after bankruptcy it is important that you get a plan. If you are ready to jump back in the housing market and recently declared bankruptcy, we would like to offer you these tips and ideas:.

As noted above, a bankruptcy can stay on your credit report for up to seven years. This rarely means you are unable to buy a house again fairly soon. Some mortgage lenders are able to approve a client for a new mortgage after a bankruptcy as soon as a month. However, that is more the exception than the rule.

Many lenders will be understandably wary of you with a very recent bankruptcy. After your bankruptcy is discharged, it is a smart idea to wait at least a year until the dust has settled on your financial situation. The smartest thing you can do during this period is to pay all of your bills and rent on time. When you apply for a home loan after a bankruptcy, home improvement loan after bankruptcy, or home equity loan after bankruptcy, the lender will see the Chapter 7, 11, or 13 reported by the U.

District Court. But if you have shown for the last year or two that you are back on your feet financially, they may approve your mortgage after a bankruptcy.

Even first time home buyers may be able to get qualified to buy a house after a bankruptcy is discharged. Also note that even with a recent bankruptcy, there are some credit card companies that may approve you for a credit card. Others may only be able to get a secured credit card, but this can still be used to build your credit. With a recent bankruptcy, you will want to show potential lenders that you have money saved up to put down on a house.

One of the most popular programs we hear about is for an FHA loan after the bankruptcy was discharged 24 months. Learn how much of a home you can afford with a FHA loan today. If you can show that you have skin in the game, it is more likely that a lender will view your file favorably and give you a mortgage. Another plus of FHA mortgages with low credit scores is that if you are approved by a lender, the interest rate will often be lower than standard market rates.

One of the biggest mistakes that many potential home buyers make is to not shop around for a mortgage. This is very important always but is especially important when you are coming out a bankruptcy. Many subprime lenders will not want to work with you, but a few companies still may. You have to shop around and find a company that offers a reasonably priced mortgage for people with bad credit. When you are ready to buy a house after bankruptcy, you will most likely be required to provide traditional income documentation, so that means that a stated income loan will be out of the question.

You can improve your credit more quickly by getting a copy of your credit report. Be sure that everything is accurate. You will have filings on your credit report about debts that were discharged in your bankruptcy. You want to make certain that nothing that was discharged in the bankruptcy is still showing a due balance.

This has been known to happen.