Getting a mortgage after bankruptcy
Filing for a bankruptcy, which normally means the end of the world for a lot of people, is not that bad after all. In fact, there is certainly life after bankruptcy. There is not only life, but also mortgage loans as well. This is certainly not easy, but not impossible either. Banks and lending institutions can certainly make life difficult while applying for one.
As you prepare to buy a house; especially after you have filed for bankruptcy, you are bound to face resistance. Not surprising, since nobody would want to lend money to somebody who was declared bankrupt not so long ago. As you file for bankruptcy, care should be taken to file for a chapter 11 or 13 filing. This ensures that liquidation is not required. You can also take assistance from attorneys who have specialized in matters of bankruptcy and related legal formalities. It is always better to disclose the facts related to bankruptcy while applying itself, as any suppression of facts can lead the bank as well as other financial companies to black list you, for withholding critical information.
Once you decide to apply for a mortgage, make sure that there is a time gap of atleast twenty four months between the filing of bankruptcy and loan application date. This is normally the time that banks insist as they feel that two years are enough for an individual to re-organize his finances and get back on track.
Now, an important aspect that could affect the processing of the loan is the credit history. No doubt, bankruptcy would certainly have affected the reports in a negative way. Hence, its time to repair these reports. As you go around repairing your credit, two important aspects that need to be taken into consideration are credit reports and credit scores. A few good habits, over the period of two years can certainly increase your credit score to average or even above average levels.
These habits include:
- Timely payments of bills, credit cards and taxes.
- Saving habits which would have increased your bank balance to a good amount, capable of even paying a down payment on the loan.
- Show certain systematic investments that you have been able to make over a period of time. You could even use the services of a financial consultant who will be able to help you with the planning aspect.
The goal of getting a mortgage loan approved needs not only meticulous planning but also good execution of these plans. This proves that bankruptcy does not necessarily end all hopes for a comfortable life. Mistakes do happen, strong individuals are those who learn from past mistakes and emerge stronger. Getting back to normal financial status after having gone through the dreaded “B” word only reaffirms this thought.
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