Bankruptcy is not a shutdown to buy a new home as you have already filed for bankruptcy case. There are many options available like government backed programs and some mortgage companies that deal with bankruptcies. When you are tired of searching about who are giving mortgage loans after bankruptcy, you can get a complete guidelines on getting mortgage loans here to make sure you’re going to buy your dream home.
Content Outline
Bankruptcy VS Mortgage
The case of bankruptcy is divided into major two parts which are filing for chapter 7 and chapter 13 as most common. However any mortgage companies that deal with bankruptcies most favorably look for guys who had filed chapter 13. Chapter 13 is believed to pay the loans or debts according to the capability of the bankrupt people. On the other hand, chapter 7 filers in most cases have financial distress and their financial condition takes longer time to proceed in the future.
More importantly, chapter 13 filers get a lot of insights and ideas on credit management when they take credit counselling. It helps improve their financial solvency to make sure they are capable to pay the mortgage in any condition. Chapter 7 may seems that the filers have to go through a bad time for longer time. They are on the process up to 10 years from the date of filing but chapter 13 should be removed within 7 years in any condition. It means chapter 13 is relieving a filer from financial bad condition within shortest possible time.
General Mortgage Guidelines After Bankruptcy
Bankruptcy is really a complex issue for the people who filed this in their life. They have to pass a critical time as their financial condition was a disaster. No one is going to partner with them for any other business issue. Though Credit Card Company may not put importance on what happened with your bankruptcy but buying a house can be a big issue because it needs a big amount of money.
How you can be important person to lend you mortgage loans by the mortgage company is not in your favor always. Most of the mortgage companies that deal with bankruptcy always ask some questions where you may work hard to improve your condition.
- Is the bankruptcy condition beyond your control?
- Is there any problem to pay the debts?
- Will this bankruptcy case happen in future?
You don’t worry to have the case of bankruptcy and this can’t let you stop from your future growth. Though some lenders look for some requirements as you have had a bad condition to your life financially. Even if you are getting credit card or paying high amount, the deal may be different in terms of mortgage loan. Mortgage loan is really a big issue because of big amount.
The lenders may look for a lot of requirements form you. In the same way, you can improve your credit score in this waiting period. However you may have a lot of space to explain about you and your bankruptcy condition to make sure you are no longer in a bad condition financially.
Show the Cause of bankruptcy
Bankruptcy is believed as a horrible event in one’s life. But different people may have different reality for bankruptcy case. Some bankrupt people may have only one simple factor to be bankrupt. On the other hand, if there are a lot of financial factors for being bankrupt, the bankrupt person was really in big and complicated financial disaster. This person had to take longer time to improve their financial position.
More importantly, one factor causing bankruptcy is not a big issue. The person faced bankruptcy by only one factor is not going to take longer time indeed. The financial capacity is much healthier even if he was declared bankruptcy. So if you want to get mortgage loan from Mortgage Company, you may show your related papers about the cause of bankruptcy.
This can really help you get mortgage loan from those company. More importantly you may submit some papers works about your present financial activities that will indicate that this will not happen any more in future.
Rebuild Credit Score
Credit card spending is another vital issue in the event of bankruptcy case. However, you may decide strongly that you are not going to use any credit card any more. Though you have existing credit card spending like car loan, student loan, furniture loan and other major appliance. In this case, you may go secured credit card that offers you loan for simple terms and condition.
Another issue is credit card score. Literally credit score explains a lot to any financial activities like mortgage loan. In any means, you should improve this credit score. For this you may pay bills, utility bills and any other bills in the right manner. You should not be late in any payment to make sure your credit score is going down. Though you have bankruptcy status, a good and improved credit score can help you get any type of loan for future.
In case you have got any discrepancy on your credit score from the credit report, you should not ignore in any way. There may be any mistake where you can defend that you have a good credit score indeed. You always get updated with credit report and conserve it for any future loan like mortgage loan from mortgage loan providing company.
Generally a bankruptcy filer may have waiting period one year to four years or more in case of payment plans. Within this time, a bankruptcy filer can improve credit score just by following cost-effective plans.
Search for friendly Mortgage Companies
You don’t worry as all lenders are not just for those who didn’t file bankruptcy. The first requirement of the mortgage companies may be not to give any loan on mortgage for the bankrupt people. But there are also many lenders who favours the bankrupt people.
So you need to conduct a little study for the mortgage company who offer mortgage loan with lower interest rate. It is also to be noted that some mortgage loan providing company may offer mortgage loan with higher interest rate. It is only because of being bankruptcy. So you should go and search friendly mortgage loan providing company.
Live within your life
You step up according to your means. As you filed for bankruptcy case, you need to be so cost-effective to make sure you are not going to face any bankruptcy case in future. Human nature is there is no end of demand. When they are in the process of buying anything, the best one is number one choice. But to get best one has to pay best price.
In the same way, when you are going to buy a house with bankruptcy case, you need to be a little bit careful that you are not going to buy a house that costs huge amount of money. So you may think small if your capability goes beyond your scope. You may go as you pay basis so that you are not facing any event like bankruptcy.
Mortgage Companies That Deal With Bankruptcies
Still you have so many options to get mortgage loans to buy your dream house. Of them, there are some government backed loans and mortgage companies that deal with bankruptcies.
Government Backed Loans
The first time home buyers with bad credit or bankruptcy is believed to be risky. There are different plans and regulation how they can get loans even if they are under bankruptcy.
FHA Loans
FHA loans can be one of the ways to get mortgage for being a home owner even if you had bankruptcy case. FHA has two guidelines for chapter 7 and chapter 13. When you are going to apply to get mortgage loan under FHA program, you have to wait for 2 years after filing a chapter 7 bankruptcy.
On the other hand, the chapter 13 may require 12 months of payment and you have to wait this duration. More importantly, you need to submit court’s written statement of approval that will ensure loan from FHA.
USDA Loans
There are same guidelines like FHA programs. However you have to wait for 2 years for chapter 7 and for chapter 13, you will be eligible after making 1 years’ worth of payment on time. The difference may be easy under this program for bankruptcy case.
Conventional Loans
There are government sponsored programs which are owned by the government. These are conventional Loans under Fannie, Mae, Freddie Mac or Ginnie Mae. They have specific guidelines to provide you loans.
- Under chapter 7 -The waiting period should be 4 years or 2 years with extenuating circumstances for those who are outside the borrower’s control.
- Under chapter 13-The waiting period should be 2 years from the time of discharge and dismissal will be 4 years with extenuating circumstances.
Aside from government and conventional loans, there are some private lenders who have laxer terms and conditions to get mortgage loans. Some private lenders who may offer you loans. No matter what your bankruptcy case was.
Peoples Bank
Peoples Bank Mortgage is known as wholly owned subsidiary of People Bank in Mendenhall in Mississippi. The bank offers mortgage and it is one of the leading mortgage providing bank in the United States of America. The three S’s are Stability, Service and Scope are the definition of this bank.
Getting a mortgage after bankruptcy is possible. This bank helps you be owner of a home even if you have filed for bankruptcy case. There are a few steps to get loan approved by this bank. This bank widely offers loan for different types of loan programs. To make it sure, they work with different financial areas where you are considered to be eligible to get this loan. You may follow some steps to make it easy.
- First you have to consult with the mortgage consultant about your plans and this consultant will explains everything in details.
- Credit review is another factor to consider and it is completely free as this bank runs credit review program that includes updating credit inaccuracies, verification of accounts and ways on how to improve credit score.
- Application is the third step and you have to apply with a complete application form. The team of this bank will guide to make a correct application.
- The loan specialist will process your information and justify information provided by you.
- There may be a lot of condition that may make you in trouble. However they will try to approve your loan in any condition.
- Finally you are close to the loans and there are formal approval activities which will be completed. In this way, you are going to stay with this bank just with relation of your mortgage loans.
There are some benefits to go with this bank and these can easily help you get mortgage loans to buy your dream home. So these features are-
- Payment is very low
- Options for cash out
- The rate of interest is low
- Laxer terms and condition
- Lower down payment
- Ability of skipping 1-2 months of payment
- Pay off the bankruptcy plan very sooner
First National Bank of America
First National Bank of America is one of the platform for the people who have filed for bankruptcy case. This bank believes that you have the right to grow even if you are ignored by all sides as you have the case of bankruptcy. There are some simple terms and condition for the people who want to get mortgage loans from this bank.
- Mortgage loans without waiting period
- 80% as highest LTV (make sure payment of 20% as down)
- Good for the people having bankruptcy issue
Prime Equity Mortgage
Prime Equity Mortgage is one of the best and trusted source to finance for real estate. You want to buy a house and you have a bankruptcy case. You don’t worry because you have prime equity mortgage which is known as mortgage brokering for the people who want to buy residential or commercial real estate property. However if the issue is about your bankruptcy case, you feel free to go with this company. Some services that you can trust on
- No waiting period after bankruptcy
- 90% LTV ratio allowed
- Offer great refinance program
- Cash out facilities
- But only can lend in California
Angel Oak Mortgage Solution
Angel Oak Mortgage Solution is one of the most leading non-prime lenders. This mortgage companies that deal with bankruptcy is really a place that you keep trust on them. Angel Oak is offering loans in the different states. They have varied programs on mortgage loans according to different case of the borrowers. You may make sure their programs and terms and condition in ensuring mortgage for you. Here are some features of Angel Oak Mortgage Solution.
- Quick application process after 1 day out of bankruptcy
- Offer loan even if credit score below 500
- 85% LTV allowed
- Good for people who have bankruptcy case
ACC Mortgage
ACC mortgage is your financial solution that makes sure mortgage loan for the people who have faced bankruptcy issue. Your home is waiting or you are going to be owner of the home even if you have status of bankruptcy. Getting loan from this mortgage company is so easy. There are no hard rules and regulation to get mortgage loan from ACC mortgage. Some features are
- New mortgage immediately when bankruptcy is discharged
- No credit score requirement
- Good for the people having financial problem.
Summing Up
Bankruptcy is really a condition that makes a bad impression on someone’s life who file it. They have to face a lot of question and conditions to get any type of loans or complete financial activities. Part of this fact, mortgage loans after bankruptcy can be hard to get. But a little study can enable you get exact solution when you need an amount as mortgage loan in the event of buying home. So this has been discussed on how to get mortgage loans easily even if you have the case of bankruptcy.