Experienced Bankruptcy Lately

Category: Finance, Real Estate.

Experienced bankruptcy lately? You may also be wondering if buying home after bankruptcy is a good idea for you.

You may wonder if you will still will be able to get a home loan. While bankruptcy can make your mortgage loan approval difficult, it is still possible to get approved. They are called the Subprime lenders. In fact there have been more and more, bad credit loans coming out all the time. They are focusing more on helping individuals with poor credit in buying home after bankruptcy. Just to give you a bit of an overview here are some very good reasons to consider after bankruptcy buying home: Increase your credit rating.

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. When you make your payments on a regular basis, you will be able to develop your credit rating. After your bankruptcy has been for ended 2- 3 years, you ought to have a much easier time qualifying for a lesser interest rate mortgage loan. Once your pre- payment penalty is done, you should be able to refinance your credit loan for a much lesser interest rate. You will be able to own an asset. Why not just buy a home, its value will, over time increase and you are working you way towards owing an asset. If you are just renting a home then you are absolutely throwing your monthly payments away.

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. You may also want to use the extra cash to invest in a business venture or for needed home improvement. Taxes and student loans will not be discharged in a bankruptcy. It is very tempting to buy an new home, do some renovations, new car, etc. , after bankruptcy discharge you have no debt left. But it is not that easy so here are some factors to consider before committing yourself to a new house payment. You will probably feel like you can afford a larger house payment due to the financial experience that you have. The Pre- payment penalty.

And usually lasts from 2- 3years. This penalty is usually about 6 months worth of house payments. Once you sign those mortgage papers you absolutely have to make those payments. The Two Year Mark. If you don t have the amount of the pre- payment penalty in savings, you are locked into making the payments or losing the house. Keep in mind that after 2- 3 years from the date of the bankruptcy discharge, mortgage loans will be much easier to get.

So, if you are within 6 months or so from the 2 year mark. With a small down payment, you might even be able to get a mortgage loan without a pre- payment penalty. It would be smart to wait it out and have more mortgage loan options. This is the most common mistake that we usually get into. Borrowing Too Much. If you do decide to buy a house, buy one that you know you will be able to afford. If your income suddenly drops, you ll want to make sure that you can still afford your house payment.

Don t max yourself out on credit, living right up to the edge of your income. Be conservative with how much home you need to buy. But don not despair because I know some people that have been in to bankruptcy but has been able to get up again and rebuild there credit quickly most of them has even been able to buy a new house. Most of us always think that bankruptcy is the end of our credit life. Bankruptcy will show up on your credit report for 10 years. Although it may be difficult to find a bank to give you a mortgage it s certainly not impossible.

That means that every mortgage lender will certainly see that fact when evaluating your mortgage application. Banks want to make money and you may find one that s willing to take the risk.

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