Bankruptcy Home Loans (Bad Credit)
Getting A Home Loan After Bankruptcy FAQIf you have recently been declared bankrupt, you are probably experiencing some difficulties in being approved for credit especially where a home loan is concerned.
More than 1.6 million American families filed for bankruptcy between 2002 and 2003; a rise of nearly 150,000 nationwide.
Is it possible to get a home loan after bankruptcy?
Yes, although you are unlikely to get a really competitive interest rate to begin with. Your ‘bankruptcy status’ stays on your credit bureau file for ten years following the date that you are declared insolvent. Whilst many mortgage companies will not touch any applicants with negative reports on their credit file, there are some lenders out there who specialize in bad credit and bankruptcy home loans.
How can I improve my chances of being improved for a home loan?
Whether or not you are approved for a mortgage loan very much depends on your credit score. An applicant who has declared himself or herself bankrupt will suffer badly in this area. There are, however, other areas of your credit file that can boost your score. For instance, keeping open one or two existing loan agreements will show that you are making efforts to repay your debts and should help to begin to restore your rating.
Try applying for a credit card – even if you do not intend to use it – as acceptance by the card provider will show mortgage companies that you are regarded as a relatively safe prospect despite your financial predicament.
Can I see a copy of my credit file?
Yes, and this is highly recommended too. Credit reports are not always completely accurate, so it is important that you check it for any errors, particularly if your credit score is in such a precarious position. One amendment in your favor could mean the difference to being turned down for a home loan and being accepted.
What happens to my home if I declare myself bankrupt?
You can keep your property but can only maintain a certain amount of equity within it. The equity levels are known as the ‘homestead exemption’ and vary from state to state.