Buying a Home After Bankruptcy
The fact that you will be seen as a credit risk by most lending institutions immediately after you have been declared bankrupt does not automatically mean that you will never be able to buy a house. The risk in home loans is rather low for lenders than loans that are not secured loans, such as loans secured through personal signatures and credit cards.
Yet still, any lender’s objective is to have a high expectation of loans being repaid in due time. The good part is that the credit score you get is normally calculated on your latest transactions more than those contracted over a longer period of time. What this means is that if you try to recover from your bankruptcy and improve your ability to build your credit, take charge of your own expenses, and begin showing a good re-payment history on any account you own, you just might be the right candidate for a home loan.
Research has shown that just within one and half to two years after someone has been declared bankrupt, that individual might be able to access a home loan just as if they had never gone through the bankruptcy process. What many lenders might be interested in at this point in time might be the down payment you are able to make, the connection that exists between your monthly income and expenses, and the loan repayment rate, as well as the consistency of your income. All of this means your previous financial difficulties might be overlooked.
These are general principles that should be considered when searching for a home to buy
- You should undertake a careful research of the house yourself. Since your house forms part or, or is likely to be the largest investment you will ever make, it’s always good to be extra careful with whatever choice you make. Research and compare various mortgage brokers, bond providers, and even homes to make sure you are getting the best deal at all times.The interest rate shouldn’t be your only determining factors. Other factors worth considering include the time span of loan, how much is involved in the down payment, any or hidden additional fees and costs, as well as insurance issues.
- Seek the service and advice of a mortgage broker – a professional broker who sources the market for the best loan deals. Mortgage brokers might bring you two major advantages that you might not have access to as an individual: The ability to have knowledge of the best loan deals in the market and expert knowledge of the market. If you are looking for the best and less costly deals in the market, then a mortgage broker is your best bet. Since they have knowledge of the market, they use innovative means to advice and guide clients to achieve credit worthiness even after bankruptcy.
- Use cash-back deals. Though the market might be tight, many brokers and websites make sure that there are cash-back programs, especially if you sign an agreement that you will work with their own selected agent. If it goes well, cash-back initiatives would be of help to you in saving a lot of money.
In the event that you have already filed for bankruptcy but would like to still buy a home, then you must work twice as hard if your chances of being able to buy a home is to have any chances of success. Though it boils down to making sure that your credit is rebuilt, it also requires a lot of patience, as you are very likely to get a lot of rejections, but with persistence, and provided all else checks out, e.g a regular income, and lower monthly expenditure that revenue or income, then chances are that you will be successful in your quest.