We all know that banks and financial institutions give home finance after looking at the credit history or the credit scores of the individual applying for the loan. But what if a person with a bad credit history or one who has filed for bankruptcy applies for the loan? The truth is that the homes loans after bankruptcy can be obtained by fulfilling the requirements for the same in a systematic manner.
Seeking Home Financing After Bankruptcy
If you are thinking about applying for home loans when you are already bankrupt, the chances are that you might get the loan after a few years (around two years) after the filing of bankruptcy. In many cases, it is possible to seek the mortgage loans after bankruptcy, if you have cleared all your due loan amounts after the period of bankruptcy. However, it is very essential that you save a sufficient amount of money, which would be required for down payment in the purchasing of the home. The answer to the question - how to get a home loan after bankruptcy is by proving to the financial institutions that you have a sufficient, sound and steady source of income. If you have a good recent record of clearing any debt by paying the monthly installments on time, then your chances of obtaining the credit from the lenders automatically increase.
Home financing after bankruptcy is mostly done by having the home as the collateral and hence the financial institutions sanctioning the loan are able to recover their money by auctioning off the home, in case the borrower defaults on the loan payments. So, if you feel confident of having the repayment capacity, getting finance for your dream home after having filed for bankruptcy would not be a difficult task. The financiers whom you approach for the home loan after having filled Chapter 11 bankruptcy or Chapter 7 bankruptcy would consider granting the amount to you based on how impressive your FICO scores are. The FICO scores are dependent on a variety of factors and your job will be to study the factors by consulting a finance expert and by trying to improve the scores. The drawback of this process is the huge rate of interest, as compared to those who are applying for the loan for the first time.
To get post-bankruptcy home financing the first thing you should do is to get a copy of your credit report from the concerned authorities and study it well. If there are any problems in the credit report, you should immediately bring it to the notice of the authorities and get it corrected in time as loans will be sanctioned only on the basis of the improvement observed in the credit report. Getting a secured credit card, paying all the due bills and charges on time to avoid any sort of penalties and saving money by avoiding unnecessary expenses for the down payment of your home are different ways of proceeding with your ambitions of buying a home after bankruptcy. Do not take too many loans, which you would find difficult to repay back to the banks.
Home financing after bankruptcy is possible, if you follow the above mentioned instructions. You should remember that having discipline in the matters related to money is very essential to build the foundations of a secure and good future.
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