After a bankruptcy, it doesn't have to be hard to get a loan for a house. When you find the right lender, you can get a mortgage loan with rates that are fair. With time and some cash, you can improve your loan application. Depending on how much money you have, you may be able to get standard rates even if you have filed for bankruptcy.
Lenders who work with people who have gone bankrupt
If you just filed for bankruptcy, you can get a loan for your home from a subprime lender. As soon as the court rules that your bankruptcy is over, you can apply for a home loan. Unless you have a lot of cash on hand, though, your rates will be about 12% higher than normal rates.
Normal lenders will look at your loan application after two years. Even though your bankruptcy will stay on your record for a few years, lenders will be more interested in how you pay your bills now and how much debt you have compared to how much money you make.
How to make your loan application better
You can't get rid of your bankruptcy, but you can make your loan application better so you can get better rates. The easiest way to get lower rates is to put down between 20% and 50% of the loan amount. Having enough money saved up for at least two months will also help.
When it comes to terms, getting a mortgage with an adjustable rate will help you get more money and lower rates for a short time. Your rates will also go down if you choose a shorter loan period. You also have the option of using points to buy down your rate. But you might be better off putting down more money and refinancing when your credit gets better in a few years.
Check out lenders before you buy a home.
Before you choose a lender, take some time to look into loan estimates. It is the simplest way to save a lot of money on your next home loan. When you ask for loan quotes from different lenders, make sure you use the same numbers and terms. So, you'll have exact numbers on which to base your choice.
The hardest part of the process is over once you've chosen a lender. You can apply for a loan online and have it done in less than ten minutes. Your loan contract will be sent to you in a few days so that you can review it one last time, and the money will soon follow.
