Getting a Second Mortgage After a Bankruptcy
If you have a recent bankruptcy, you may need to wait up to 2 years in order to get approved for any mortgage loan. However, you may be able to get approved for a second mortgage in less than two years from the time of your bankruptcy discharge.
Here are some tips to getting approved:
Build Good Credit
After a bankruptcy, rebuild your credit history by making regular payments and building up cash reserves through a savings account or saving bonds, you will put yourself in a better position to refinance your home.
Understand SubPrime Lenders
Subprime lenders charge higher rates to finance higher risk borrowers, find out what the current rates are that you can expect from a subprime lender. Make sure you know what comparable rates are so you don't get taken advantage of by a subprime lender who's rates are too high.
Sub prime brokers vary in the amount of fees and points they will charge. With adverse credit, you should expect to pay a couple of points higher than a traditional loan. The best way to ensure you are getting a competitive rate is to shop around.
Search for a Good Rate
Subprime brokers have moved online, allowing you to easily compare rates and fees. You can gather general quotes by giving out basic information like how much you want to borrow and your property's current value.
With these basic quotes you can quickly compare financing costs. Be sure to include fees when you consider the total cost of the loan. Once you have compared several financing quotes, pick the top three to investigate further.
Compare Mortgage Quotes
Mortgage rates are determined my many different factors such as property location and your employment history. In order to get a real refinancing quote, you will have to provide this detailed information to a sub prime broker. You can do this through online mortgage websites with no risk.
Compare the rates, fees, and terms of each refinancing offer. If you have any questions, you can contact the sub prime broker over the phone or through their website.
Apply Online
After you have chosen which lender you want to use, you will probably need to fax in or mail a physical, signed application and then complete the loan process.
Our Recommended After Bankruptcy Mortgage Lenders:
Mtg Lenders For People With Credit Problems:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
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