Home Loans After Bankruptcy

Life after bankruptcy need not be the nightmare it is made out to be. Even is a sluggish economy and a tightening of financial policies, there are plenty of options for home buyers with a BK on their credit report. The first step towards qualification is to re-establish one's credit. For those who file a Chapter 13, the minimal recovery time is 12 months of on time payments and verified ability to pay the mortgage. For those who discharged with a Chapter 7, 24 months of stable payments are required.

But, to re-establish credit once the BK has been added to a credit report can be difficult through traditional credit building methods. However, one fast and sure way to build your credit rating is to take out a few secured credit cards and make regular and timely payments. Though money may be tight, you can use these cards for everyday purchases, even your groceries. The amount of the monthly charges are not significant, but rather the focus is on the payment history. Though your new secured credit cards will come with a fee, and perhaps a higher interest rate, the benefit in the end is worth the extra cost now.

For faster, and perhaps cheaper access to new and improved credit, you may ask a friend or relative to put you on their credit card as an authorized user. You will not receive a bill for the card use, but will benefit from the owner's good credit. However, this strategy should only be applied to people with a solid credit history, because if they are late or miss a payment, the "piggy-backer" is also subject to credit reporting penalties.

Another option on the table is to use a large down payment in exchange for points on your mortgage. You may enjoy a lower interest rate with a sizable down payment, even at the minimal marker date from the discharge. Progressive lenders are looking for a reason to finance you, not turn you away. So, if you need to liquidate a 401K or shift around some stock, it's worth the effort. No matter what the economy is now, home values have always inclined after a plummet. Your home is one of the best investments you'll ever make, and some wise planning with your assets can make a purchase happen after a bankruptcy.

For best results to get a bankruptcy home loan, try mortgage shopping through a brokerage firm rather than your bank. The banks work exclusively with their own loan products, whereas a brokerage firm will shop for you. You'll be surprised at how many offers will be competitively priced in hopes of wooing you into contract with them, so be diligent in your search and wait for the best terms and interest rates. Bankruptcy loan candidates are no longer subject to excessive interest and closing costs. The day has arrived where a BK survivor can have it all.

www.bankrate.com/finance/debt/getting-a-mortgage-after-a-bankruptcy.aspx

www.bankruptcyhome.com/Mortgage_After_Bankruptcy.htm