Can You Get A Mortgage After Bankruptcy?
It is common knowledge that claiming bankruptcy has a very negative effect on your credit rating making it difficult to qualify for loans or rent accommodation, but the question is “Can you get a mortgage after bankruptcy?” Yes!
It is certainly easier to qualify for a mortgage if you wait at least two years after your bankruptcy has been finalized and your debts discharged. This is so that your credit rating has had a chance to recover, thereby showing lenders that you are not such as risk. However, if you are in a rush you can get a mortgage after going bankrupt by following these simple steps:
• Raise your credit score – Immediately after discharge you should work on increasing your credit rating by qualifying for credit card and small loans then being diligent about paying them off.
• Organize your finances – Use the skills learned in the mandatory financial education course to organize all your financial documents so you have a good idea of what you will be able to comfortably afford.
• Shop around – Research different loan programs and rates online and in-person. Get at least 3 or 4 quotes and once you have chosen make sure you read the fine print very carefully.
Mortgage approval is based on three core aspects: good credit, income verification, and a down-payment. If you have a steady income from secure employment but you have recently been bankruptcy, you will have to weigh the balance in your favor by putting down a larger down-payment. As this can be as much as 20%, you may have to cash in any investments remaining after the finalization of your bankruptcy or approach family and friends for the down-payment. There are also numerous bankruptcy loan programs or down-payment assistance programs available in the U.S. to help those financial need raise the money necessary to buy property.
Although it may be more difficult and more costly, you can get a mortgage after bankruptcy.