How to buy a Home
filed bankruptcy papers? You may again want to possess a home and start wondering
as how to get a fresh mortgage loan, as getting a mortgage loan has become a very
tedious process for any person who has been declared bankrupt.
the process of getting a mortgage loan with a bankruptcy track record behind you
is very difficult, you may still have hope of securing a loan in future.
A recent concept
of Subprime lending is in vogue and such subprime lenders are in fact helping
individuals with poor credit in buying home after bankruptcy.
lending is slowly establishing its roots, as there are increasing number of people
with bad credit who are looking for home financing. However, you may have to take
into account few reasons such as:
your credit rating. As you make your payments regularly, there is a good chance
of increasing your credit rating and once your pre-payment penalty is done, you
will be in a position to refinance your credit loan presumably for a lower interest
for a period of 2 to 3 years. You will be having a much easier time once your
bankruptcy time has passed around 3 years and by that time you may even be eligible
for a mortgage loan for a lesser rate of interest.
the asset instead of renting - If you renting a home and paying rent for the asset,
you can try out alternate plan of buying a home and use your rental payments toward
paying the mortgage loan installments.
Over a period of time, you will be in a position to own a home with the money
that you would have paid out as rents.
you own your house without any liability over it, you can even think of taking
an equity loan over the asset and square off your other long-term liabilities.
be aware that you cannot discharge taxes and student loans in a bankruptcy and
you can pay off these liabilities through the equity loan.
is very normal for persons to buy a new home or a car or do some renovations,
etc., after bankruptcy. You may even venture out to taking a bigger liability,
but it is better you consider few of the following facts before that leap:
Pre-payment penalty - Once you sign your mortgage papers, you have no option
but to pay this penalty which is usually about 6 months worth of house payments
and lasts from 2-3 years. In any case you do not have sufficient money to pay
these, you eventually end up in losing the house.
Two-Year Mark - It is better to wait for 2 to 3 years after your bankruptcy
discharge. Getting mortgage loans are easier after the initial 2 to 3 years and
you will be able to get a loan without a pre-payment penalty and with a small
Too Much - The most commonly committed mistake is taking a loan that one cannot
afford to repay. And you and I are no exception.
do a self - Introspection and decide on the home and the loan amount which
you can afford comfortably and that can match your income levels. A conservative
approach is best suited if you have any reservations over your income earnings.
is not the end of your credit life. You need not despair as there are so may avenues
and opportunities for you to get a home through mortgage loan and you can still
prove your credit worthiness without much difficulty.