Buying a home after a bankruptcy doesn't limit the types of mortgage loans you can qualify for. If anything, you have more loan options with subprime lenders. However, depending on how soon your bankruptcy was resolved, you may find that you pay higher rates and down payments to secure your home financing.
Available Bad Credit Home Loans
In recent years, subprime lenders have come up with a number of new financing terms for home loans. So even with adverse credit, you can still get 100% financing or a 30 year fixed rate mortgage. Interest only loans and adjustable rate mortgages are also good options to increase your buying power.
If you are looking to secure financing over the conventional price caps, then subprime lenders can also offer you jumbo loans. All loan terms are flexible, as well as fees and conditions.
Hurdles Of A Bankruptcy
Right after a bankruptcy, your credit score will require you to put down a sizeable down payment with lenders, usually around 50%. But after the first year, you can reduce your down payment to just 25%. In two years, you can qualify for zero down and conventional rates.
It is only after the first two years of a bankruptcy that your credit score will be significantly affected. After that, financing companies look at other facets of your credit, such as payment history, debt ratio, and employment outlook.
Get A Better Deal With A Better Lender
Subprime lenders compete for your business by offering low rates and fees. While there are certainly some companies that would take advantage of your credit situation, you can protect yourself by being a smart consumer.
Start by researching a number of loan companies. Ask for loan quotes based on your credit and income. After looking at the APR and fine print, you can make a decision on which mortgage loan is right for you.
You can also get pre-approved for your home financing. Not only will it help you in the home buying process, but it will also give you an idea of your financing budget. With online lenders, you can complete your application in minutes and have funds available in as little as two weeks.
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Frequently Asked Questions
Credit Counseling
By: laurotella | 17-08-2008
Has anyone done or know about Credit Counseling? I would rather not claim bankrupcy but I can't pay my credit cards and I have been talking to a company that does Credit Counseling. Please help
How was the White Sox Park Financed
By: lindabakerrain | 16-08-2008
How was the White Sox Park Financed
Vacation Homes
By: Sandra | 16-08-2008
Who is the best source for getting a low fee and low down payment mortgage for a vacation home?
jgaylesan@aol.com
Asking for a discount rate
By: Steven S | 16-08-2008
Dave, My wife and I are purchasing a 2nd home and I was wondering since both my wife and myself have credit scores in the 800+ range, am I out of line thinking I should be able to ask my lender for a better rate on mortage interest (thinking about 1/2% to 1/4% discount). I will be using purchasing this home with a VA home loan.
What kinds of food items are taxable and which are ...
By: grmncat | 16-08-2008
What kinds of food items are taxable and which are not?
What would Jesus do in incident where husband ...
By: Connie | 16-08-2008
what would Jesus do in incident where husband recently died and previously made arrangements for a couple to rent home $200/mth for a year anticipatng them buying it. Before death got check $1200 which would carry the agreement (verbal) for another 6 months Dec 2008. They noted they could not sell their home. They called 8/15/2008 asking to stay until June 2009 at the same rent $200/mth
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