Even after having gone through the stress of bankruptcy, it’s still possible to apply for and be approved for home financing. Buying a home after bankruptcy is indeed possible. When looking to buy a home despite the challenges of having poor credit, be sure to keeps these important factors in mind. The two foremost factors required to receive a mortgage loan are the verification of a stable income and the ability to produce an affordable down payment.
Most often, creditors will not even consider approving you for any kind of loan until at least two years after your bankruptcy has been discharged. Once you have exceeded this two year period, however, you should be once again eligible to refinance your home. In fact, if you have been on time with your bills and other financial obligations since the discharge of your bankruptcy, you may even qualify for 100% financing.
However, if you cannot or do not wish to wait the two years after bankruptcy discharge and require a mortgage loan right away, it is absolutely necessary to have a spotless repayment history. Not only must you have a perfect payment record on your monthly dues, but you should also have the ability to put forth an immediate down payment. These two things will give you a stronger argument for your case. It usually takes enough of a down payment to cover at least four to six percent of the price in order to get approval.
Besides maintaining a traditional savings account and setting aside money, there are a number of ways to afford your mortgage loan down payment. Try utilizing the following tips to help you build up your down payment:
Approach your trustworthy friends and relatives for financial assistance.
Once your home has been financed, you can in time request a second or even third mortgage worth part of or up to the total value of your home. You can then use this money to settle your debts to those who helped you with the down payment. Just keep in mind that you will need to be prepared to provide complete information to your cautious lenders regarding where the money in your down payment came from before your financing is approved. In this situation, being less than truthful to your lender would constitute an attempt to defraud, opening you up to an entirely different set of risks and serious problems in the future.
Your next option is to participate in a Neighborhood Gold or Nehemiah Program.
These established payment assistance programs are designed to help you with your down payment. Through these programs, you involve the seller of the home in backing your down payment.
Under normal circumstances, it is illegal to receive down payment funding from your seller. However, through these specific programs, the process falls within legal parameters. In addition, there are also existing down payment assistance programs available which, like a grant, do not require any repayment whatsoever from any party involved. An internet engine search for the words “down payment assistance” should yield plenty of results to gather more information.
Your final option is to liquidate your 401K Plan.
Cashing out your 401K Plan or other properties and investments you have at your disposal will provide the finances you need quickly. As in the case with your friends and relatives, you can use a second or third mortgage to repay the money you’ve essentially borrowed from yourself.
With these options and more available to you, buying a house after a bankruptcy experience is no longer an impossibility. To the contrary, the modern day mortgage and loan industry had made it simpler than ever to refinance and, as it grows and evolves, the process only gets easier. Also, by refinancing your mortgage on your home after you buy, you can quickly have extra cash on hand and even save money in the process. Answer your questions regarding how and when to get your mortgage refinanced here on credit and mortgage index. You can also find the tools you need to calculate the numbers for your mortgage refinancing as well.