Is there a Mortgage after Bankruptcy?

Is there a Mortgage after Bankruptcy?
More than 1.6 million American families filed for bankruptcy between 2002 and 2003; a rise of nearly 150,000 nationwide. If you have recently declared bankruptcy, you are probably having difficulties getting credit approval, especially for a home loan.

And if you find a lender to work with you, you are unlikely to get a competitive interest rate. Your bankruptcy status stays on your credit bureau file for ten years following the date that you are declared insolvent. While many mortgage companies will not touch any applicants with negative reports on their credit file, there are some lenders out there who specialize in bad credit and bankruptcy home loans.

Interestingly, it can sometimes be easier to get a mortgage after a bankruptcy than to get other types of installment loans.

Even with the latest developments in the Subprime industry, there are still lenders who continue to offer high Loan-To-Value programs to people who have recently declared bankruptcy.

Make sure you have copies of your Bankruptcy discharge papers to present when applying for a New Mortgage.

Unless your bankruptcy is very recent, do not hesitate to look for a mortgage. While it may be more difficult to qualify, there are some companies that specialize in mortgages for those who have had credit challenges. You may be pleasantly surprised with the options out there for you. Of course, you will need to spend more time finding the right mortgage broker who can assist you, so it will pay to be patient and persevering.

Following a bankruptcy, it's important to begin reestablishing good credit. One option is a secured credit card. With these, you open a depository account with a financial institution and use your own funds as a line of credit. These credit cards are a great tool for helping your credit profile recover from a bankruptcy.

After your bankruptcy you should review a copy of your credit report to make sure all negative accounts that were included in the bankruptcy are correctly reported. Some creditors may not report accounts as listed in bankruptcy and those accounts will still show open and derogatory.

There is absolutely a mortgage after bankruptcy for you, provided that you avoid making late payments on your mortgage or any other loans or credit cards following the bankrupcty, whether it is a Chapter 13 Bankruptcy or a Chapter 7 Bankruptcy. LAte payments on a mortgage after a bankruptcy can seriosuly hurt your chances of qualifying for a mortgage.

There are lenders who can provide bankruptcy buyouts to help satisfying your payments to your trustee. These are typically short-term loans to help you get back on your feet, rebuild your credit that qualifies you for a better lower payment program.

There are many lenders that will provide a loan after you have filed for bankruptcy. Contact a mortgage broker to determine what is available for your situation.

An FHA loan can be used to "buy out" a Chapter 13 Bankruptcy if it has been open at least one year. You must have made all payments on time and developed no other bad credit during that time.

» DISCLAIMER: The information contained in this article on 'Is there a Mortgage after Bankruptcy?' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.