Buying A Home After Bankruptcy: Get A Bad Credit Loan On Mortgage |
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A few years ago, if you had a bankruptcy or a foreclosure on your credit report, you could forget about trying to get a bad credit loan on mortgage. If you were lucky enough to find someone who would finance you, your interest rate would be through the roof and plan on putting 10-20% down. But today, this is not the case. There are many programs available today to help people who have recently suffered a bankruptcy or foreclosure to get a bad credit loan on mortgage or mortgage refinance loan. If you have a recent bankruptcy on your credit and are looking to finance a home, there is hope. Buying a home with bad credit will put more emphasis on the other two factors needed to get a bad credit loan on mortgage: income verification and down payment. After bankruptcy most lenders want you to wait at least 2 years from the time of the bankruptcy discharge before they will consider you for bad credit loan on mortgage. After the two-year waiting period is over, you should be able to get financing easily. You should also be able to get 100% financing as well. You can usually achieve this as long as at least most of your payments have been reported to the credit bureau as having been paid on time since the discharge of your bankruptcy. If you are looking to get a bad credit loan on mortgage after bankruptcy sooner than the 2 years from the time of discharge, you will need to have almost flawless payment history since your bankruptcy discharge. Also, you may need to have a down payment. If you have even 3-5% to use as a down payment, that may be enough to help you get approved. To qualify for a bad credit loan on mortgage after a recent bankruptcy or foreclosure, you should have a credit score of 580-600 or higher. With a credit score of at least 600, depending on your financial situation, you could be able to get 100% financing and an interest rate of 6.5%-7% depending on your income verification. If you have even 5% for a down payment, you may get approval with a lower credit score than 580. The key to getting approved, even with recent major credit problems, is to make your current payments on time and be able to have good income verification. There are major lenders now, who specialize in financing people with recent credit problems and difficult situations. One of the techniques lenders use today, to make these types of loans work with 100% financing, is to do what is called an 80/20-combo loan. That is where you purchase the home with a bad credit loan on mortgage, which is 80% of the loan, and a second mortgage, which is 20% of the loan. The 80% loan will usually be a lower interest rate and the second mortgage will usually be higher. It could be as high as 10%-12%. Of course, with bad credit, getting approved for a refinance loan is going to be much easier than getting approved for a new home loan. If you can get approved for a new bad credit loan on mortgage, sometimes it is good to refinance within 6 months to a year after your purchase and lock in a lower overall rate and payment. With bankruptcies and foreclosures on the rise, lenders are modifying their programs to continue to cater to the needs of borrowers. There are ways to get a down payment for your bad credit loan on mortgage besides having the money saved in the bank. Here are some ideas of ways to do that: Borrow or ask for a gift from relatives. After you have financed the house, you can usually go and take out a bad credit loan on mortgage up to the full value of your house, and then you could repay the relatives. Keep in mind that if you intend the money to be as a loan only from the relatives, you would need to disclose that to the lender before you close. Lenders usually have regulations about where the down payment is coming from and if you are not honest, it could be considered defrauding a lender. You could cash out a 401K or another investment and like in the first example, repay yourself with a bad credit loan on mortgage after the loan has closed. Bad credit loan on mortgage after bankruptcy is getting to be much easier to obtain these days. So, if you filed for bankruptcy recently and now want to buy a home, you can do so by availing bad credit loan on mortgage!!! |
