Home Loan After Bankruptcy...

One of the most common questions is "Will I be able to get a home loan after bankruptcy?"

The answer is yes, you can. BUT. A couple of years ago, anyone who could fog a mirror was able to get a loan. And you all know where we are now with the all of the foreclosures going on. Perhaps that was the cause or one of the reasons for your filing bankruptcy.

Credit is tightening and that is a good thing. It is a lot more difficult to qualify for a loan these days, not to mention trying to get a home loan after bankruptcy! We are in a new era with so many foreclosures and bankruptcies going on that I don't think anyone really knows where this is all going to settle. The government is working out a plan to bail out homeowners, lenders are going under - who knows what we are all going to need in order to qualify for a loan in the near future. The rules are changing.

The absolute best advice I can give you is this: Give yourself time to heal. Heal yourself and your credit before you jump into more debt. If you wait for two years you will be able to get a good loan and not have to use a subprime lender.

Beware

Beware of predatory lenders - Most subprime lenders take advantage of high risk borrowers by charging excessive fees and unreasonable interest rates. Make sure you apply with a reputable lender.

Even if your credit history is very poor, you may still be able to get approved for a mortgage loan. If you really must buy a home now and are turned down, keep working on rebuilding your credit history. Wait a few months and re-apply.

Think Lease/Option

A lease/option is pretty much what it sounds like. The lease part is you are renting a home. The option part is that you pay an upfront fee to purchase the home at at later date. It could be one or two years in the future. Some of the monthly rent can also be applied to the purchase of the home.

The option part also means that you, the buyer, have the option of purchasing the home at the end of the lease term, or you can walk away. You end up loosing the option payment, but you can walk away. The seller does not have that option. They must sell you the home at the agreed upon price, even if the home has appreciated to a higher price that what you agreed to.

This is a really cool way to purchase a home after you have filed for bankruptcy and don't have a lot of money to put down and have bad credit. It is a win/win for both you and the seller.

If you would like more information on lease/options, please contact me.

Getting a home loan after bankruptcy is not impossible, but I strongly suggest looking into a lease/option. There are so many sellers that cannot sell today, you could be doing them a favor and helping yourself at the same time.

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