If you are trying to get approved for home loans a bankruptcy can be a big determining factor in whether or not you get approval. Bankruptcy weighs heavily on several different aspects of this loan process but by knowing what is to come ahead of time you can effectively increase your chances of getting approved rather than denied.
Typically, a mortgage loan company will require you to wait a specific amount of time after your bankruptcy has been discharged before you can getting approval consideration. The specific type of bankruptcy you filed for will be the biggest determining factor s to how long you will have to wait. Chapter 7, fr instance, usually requires you to wait about 2 years before you can get a loan approved. Some lenders may even want you to wait for 4 or more years before they give you consideration.
Chapter 13 has a waiting period of about the same length of time except for FHA loans where you could possibly be able to get financing as little as 12 months after you have filed for bankruptcy. The date you filed will be the final decision maker here as to just how long they will want you to wait of course. In order to do things this way you will need to get your trustee to approve you to add a new debt. Without this you will not have chance at getting loan approval.
The biggest hurdle that most people will face after bankruptcy is reestablishing their credit history so they can actually get approval. You will also need to make sure that you have no negative reports on your credit file since your bankruptcy.
To firmly reestablish your credit you will need to work on getting things like a car loan and a few credit cards that you can keep below 10% of the credit limit. Any home loan will require you to have reestablished your credit before they will even consider approving a loan.
One way to get around this is by going with a non traditional home loan but these types of loans often require very large down payments and the interest rates can be much higher than a conventional loan.
Bankruptcy does not mean you will never get approved for a loan again, but you do have to show these loan companies that it is a one time thing and you are doing better now. Good credit is very important and shows how reliable you are at paying your debts after you got help.
Typically, a mortgage loan company will require you to wait a specific amount of time after your bankruptcy has been discharged before you can getting approval consideration. The specific type of bankruptcy you filed for will be the biggest determining factor s to how long you will have to wait. Chapter 7, fr instance, usually requires you to wait about 2 years before you can get a loan approved. Some lenders may even want you to wait for 4 or more years before they give you consideration.
Chapter 13 has a waiting period of about the same length of time except for FHA loans where you could possibly be able to get financing as little as 12 months after you have filed for bankruptcy. The date you filed will be the final decision maker here as to just how long they will want you to wait of course. In order to do things this way you will need to get your trustee to approve you to add a new debt. Without this you will not have chance at getting loan approval.
The biggest hurdle that most people will face after bankruptcy is reestablishing their credit history so they can actually get approval. You will also need to make sure that you have no negative reports on your credit file since your bankruptcy.
To firmly reestablish your credit you will need to work on getting things like a car loan and a few credit cards that you can keep below 10% of the credit limit. Any home loan will require you to have reestablished your credit before they will even consider approving a loan.
One way to get around this is by going with a non traditional home loan but these types of loans often require very large down payments and the interest rates can be much higher than a conventional loan.
Bankruptcy does not mean you will never get approved for a loan again, but you do have to show these loan companies that it is a one time thing and you are doing better now. Good credit is very important and shows how reliable you are at paying your debts after you got help.
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