Buying a home with
recent bankruptcy
If you have a recent bankruptcy on your credit and are looking
to get financing for a home, there is hope. Buying a home
with bad credit will just put more emphasis on the other
two factors needed to get a mortgage loan, which are; income
verification and a 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 a mortgage loan. 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 mortgage loan 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.
There are ways to get a down payment for
your mortgage besides having the money saved in the bank.
Here are some ideas of ways to do that:
1. Borrow or ask for a gift from relatives. After
you have financed the house, you can usually go and take
out a 2nd or 3rd 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.
2. There are down payment assistance programs like
Neighborhood Gold or the Nehemiah program. These programs
basically aid the seller in helping you with a down payment.
Receiving a down payment from the seller of the property
is illegal, but through these programs, it is legal. There
are also other down payment assistance programs which are
grants and do not need to be repaid or paid for by anyone.
To find out about these, do a search on “down payment
assistance” with your favorite search engine.
3. You could cash out a 401K or another
investment and like in the first example, repay yourself
with a 2nd or 3rd mortgage after the loan has closed.
Mortgage loans after bankruptcy are getting to be much
easier to obtain these days. If you would like to see a list
of our preferred bad credit mortgage lenders, visit this
page: After
Bankruptcy Mortgage Lenders.
Carrie Reeder is the owner of ABC
Loan Guide. ABC Loan Guide is an informational loan
website with informative articles and helpful lists of
recommended lenders for bad credit mortgage loans. |
