Personal - Buying a Home After
Bankruptcy
Following a bankruptcy, your credit score plummets. This makes it
difficult to obtain credit on a home mortgage, vehicle loan, credit
card, etc. If you are hoping to purchase a home after a bankruptcy,
traditional lenders and mortgage companies will not propose the best
terms. Moreover, these lenders may refuse to do business with you.
When searching for a mortgage lender, many people contact traditional
lenders. However, these lenders primarily concentrate on conventional
loans. To obtain a conventional loan you must have a credit score of at
least 640. This score fluctuates according to lender. In some cases,
lenders require a score of 660. Moreover, you must have a down payment.
Standard down payments range from 3% to 20%.
Working with Sub Prime Mortgage Loan Lenders
If you do not fall into this category, you must obtain a mortgage
loan from another source. Sub prime and high risks lenders offer loans
to people with low credit scores. Low credit scores may be caused by
bankruptcies, repossessions, bad credit, etc. Additionally, having
excessive debt may also lower your credit score, making you a great
candidate for a sub prime mortgage loan.
If purchasing a home after bankruptcy, it is suggested that you delay
the process for at least 24 months. This allows time for you to boost
your credit rating. This is not a requirement. You may buy a home as
soon as your bankruptcy is discharged. Waiting is great for raising your
credit score. While you may not qualify for a conventional loan, a
credit score increase from 530 to 620 will improve your chances of
receiving a reasonable mortgage rate from a sub prime lender.
Obtaining a Mortgage Loan from a Sub Prime Lender
Applying for a mortgage loan online is perfect for locating suitable
and reputable sub prime lenders. You have the option of calling
individual lenders, or requesting quotes from a mortgage broker. Working
with a broker is recommended. Do not accept the first quote you receive.
For the best rate, you have to research and obtain multiple quotes.
Mortgage brokers will email you quotes from a choice of lenders. After
you review the rate, services, and terms from at least three lenders,
accept a sub prime loan with the best package.
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