Bankruptcy and Buying a Home - Types of Bad Credit Mortgage Loans
Buying a home after a bankruptcy doesn't limit the types of mortgage
loans you can qualify for. If anything, you have more loan options with
subprime lenders. However, depending on how soon your bankruptcy was
resolved, you may find that you pay higher rates and down payments to
secure your home financing.
Available Bad Credit Home Loans
In recent years, subprime lenders have come up with a number of new
financing terms for home loans. So even with adverse credit, you can
still get 100% financing or a 30 year fixed rate mortgage. Interest only
loans and adjustable rate mortgages are also good options to increase your
buying power.
If you are looking to secure financing over the conventional price
caps, then subprime lenders can also offer you jumbo loans. All loan terms
are flexible, as well as fees and conditions.
Hurdles Of A Bankruptcy
Right after a bankruptcy, your credit score will require you to put
down a sizeable down payment with lenders, usually around 50%. But after
the first year, you can reduce your down payment to just 25%. In two
years, you can qualify for zero down and conventional rates.
It is only after the first two years of a bankruptcy that your credit
score will be significantly affected. After that, financing companies
look at other facets of your credit, such as payment history, debt ratio,
and employment outlook.
Get A Better Deal With A Better Lender
Subprime lenders compete for your business by offering low rates and
fees. While there are certainly some companies that would take advantage
of your credit situation, you can protect yourself by being a smart
consumer.
Start by researching a number of loan companies. Ask for loan quotes
based on your credit and income. After looking at the APR and fine print,
you can make a decision on which mortgage loan is right for you.
You can also get pre-approved for your home financing. Not only will it
help you in the home buying process, but it will also give you an idea
of your financing budget. With online lenders, you can complete your
application in minutes and have funds available in as little as two
weeks.
Our Recommended After Bankruptcy Mortgage Lenders:
Mtg Lenders For People With Credit Problems:
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