Bankruptcy And Buying A Home – Types Of Bad Credit Mortgage Loans
October 14, 2009 by admin
Filed under Bankruptcy Bad Credit
Buying a home after a bankruptcy doesn’t limit the types of mortgage loans you can qualify for. If anything, you have more loan options with subprime lenders. However, depending on how soon your bankruptcy was resolved, you may find that you pay higher rates and down payments to secure your home financing.
Available Bad Credit Home Loans
In recent years, subprime lenders have come up with a number of new financing terms for home loans. So even with adverse credit, you can still get 100% financing or a 30 year fixed rate mortgage. Interest only loans and adjustable rate mortgages are also good options to increase your buying power.
If you are looking to secure financing over the conventional price caps, then subprime lenders can also offer you jumbo loans. All loan terms are flexible, as well as fees and conditions.
Hurdles Of A Bankruptcy
Right after a bankruptcy, your credit score will require you to put down a sizeable down payment with lenders, usually around 50%. But after the first year, you can reduce your down payment to just 25%. In two years, you can qualify for zero down and conventional rates.
It is only after the first two years of a bankruptcy that your credit score will be significantly affected. After that, financing companies look at other facets of your credit, such as payment history, debt ratio, and employment outlook.
Get A Better Deal With A Better Lender
Subprime lenders compete for your business by offering low rates and fees. While there are certainly some companies that would take advantage of your credit situation, you can protect yourself by being a smart consumer.
Start by researching a number of loan companies. Ask for loan quotes based on your credit and income. After looking at the APR and fine print, you can make a decision on which mortgage loan is right for you.
You can also get pre-approved for your home financing. Not only will it help you in the home buying process, but it will also give you an idea of your financing budget. With online lenders, you can complete your application in minutes and have funds available in as little as two weeks.
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Bankruptcy And Buying A Home – 3 Benefits To Buying A Home After Bankruptcy
October 12, 2009 by admin
Filed under Bankruptcy Bad Credit
Bankruptcy And Buying A Home – 3 Benefits To Buying A Home After Bankruptcy
If you have filed bankruptcy recently, you may wonder if you can get approved for a home loan. You may also wonder if buying a home after a recent bankruptcy is a good idea for you.
While a bankruptcy can make getting approved for a mortgage loan more difficult, it is still possible to get approved for a mortgage loan. In fact, there are more and more bad credit loan programs coming out all the time. Subprime lenders are focusing more on helping individuals with poor credit acheive home ownership. This is happening mostly because bankruptcies are still on the rise and there is an increasing number of people with bad credit who are looking for home financing.
Here are some reasons to consider home ownership after a bankruptcy:
1. Increase Your Credit Score – When you make your payments regularly, you improve your credit rating. Once your pre-payment penalty period is over, you should be able to refinance your mortgage loan for a much lower interest rate. After your bankruptcy has been discharged for over 2-3 years, you should have a much easier time qualifying for a lower interest rate mortgage loan.
2. Accrue Equity In Your Home – If you are just making rent payments, you are throwing your monthly payments away. When you own a home, over time, home values increase and you are working toward owning an asset.
3. Take Out An Equity Loan To Consolidate Debt or Get Needed Extra Cash – Once you have bought your house, as soon as 6 months or so later, you might be able to take out an equity loan on your home and consolidate any other debt that you might have since your bankruptcy or debt that could not be included in your bankruptcy. Taxes and student loans will not be discharged in a bankruptcy. You may also want to use the extra cash to invest in a business venture or for needed home improvement.
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Bankruptcy And Bad Credit Issues No Longer Means No Mortgage
October 11, 2009 by admin
Filed under Bankruptcy Bad Credit
In the past, traditional mortgage lenders have automatically rejected people who had declared personal bankruptcy. Many potential home-buyers felt they must wait at least seven to 10 years after a bankruptcy to be eligible to become homeowners. This is a common misconception for many who believe their chance of home ownership is a long way away.
While some people declaring bankruptcy have had trouble managing their money, a large number of those declaring have simply experienced unfortunate events. Australians are filing bankruptcy at record-high levels over the last five years. The rise in petrol price and the recent increase in interest rates won’t help either.
There are some ominous signs out there…
Though a bankruptcy is certainly a blemish on a credit report, it does not necessarily disqualify a borrower. Recognising that sometimes bad things happen to good people, some select loan officers are becoming more willing to take a calculated risk.
Some lenders use a securing system to determine whether potential buyers are a worthwhile risk. Unfortunately, bankruptcy gives a low rating. However, select lenders are beginning to look beyond the rating and look at the individuals in need.
Instead of waiting two or four years after being discharged from bankruptcy, some mortgage professionals are willing to give a home loan much sooner. Those who have declared bankruptcy liquidation may be eligible for a loan one year after discharge, and those who are in a Part IX debt agreement could also be able to get a mortgage.
Another common misconception is that a previous bankruptcy on your credit report will require you to have a large down payment and pay extremely high interest rates. There are currently programs available with as little as 5 percent down with very attractive rates.
Some lenders are even prequalifying buyers for a loan, saving time and making the home-buying experience easier and more efficient. When a buyer prequalifies they will have the advantage of greater negotiating power.
No matter what the situation, select mortgage professionals have a program that will work for the buyer with a bankruptcy history. If a buyer cannot get approved, there are customized plans that can re-establish credit to help the buyer become mortgage-ready, ensuring home-ownership in the future.
Because of new options, bankruptcy no longer needs to stand in the way of getting a home loan. With the help of more creative lenders, those who have experienced financial difficulty will have an easier time getting a mortgage.
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