Getting A Mortgage After Bankruptcy
Unfortunately, many bankruptcy attorneys do not give their clients advice on how to restore their financial credibility or get a mortgage after bankruptcy. Anyone who files for bankruptcy naturally needs to restore themselves financially. Consumers think that it is impossible to obtain a mortgage after bankruptcy and even if they did, they could expect interest rates to be ridiculously high.
After a bankruptcy, your debt to income ratio is actually lowered down automatically. That allows you to acquire a loan easier and get a mortgage after bankruptcy within a month of discharge date. When obtaining a mortgage after bankruptcy, make sure you have at least one open bank account that was not included in the bankruptcy filing.
Restore your credit and get a mortgage after bankruptcy by following these steps:
Contact credit reporting agencies. Get a copy of your latest credit report. To get a mortgage after bankruptcy, credit accounts that are absolved from bankruptcy should be removed immediately from your credit report. You can directly contact Equifax, Experian, and Transunion and request for a copy. Have negative items removed from your credit report. Send a copy of bankruptcy discharge papers (not the original) to the 3 credit reporting agencies and request these items to be removed. You can do this process by mail or online for a small charge. Once this is done, it will be easier to get a mortgage after bankruptcy. Pay your bills on time Bankruptcy allows you to "start over" financially. Obtaining a mortgage after bankruptcy is one way to start over. This time make sure to pay all your bills on time. Do not ignore problems with upcoming bills. Call your creditors before the due date and let them know what your challenges are. Document your rental history This is challenging and critical as it is the largest monthly expense that you can have. Underwriters who sign off your approval will scrutinize how you paid your rent as they are going to replace it with a mortgage payment. Be specific on your documentation. Obtain a secure credit card This allows you to deposit money into an account to secure a credit, then borrow against it to establish a good payment history. The bank will increase your credit limit and eventually return to you the deposited amount. Go for trade references that are non-traditional Cell phones, car insurance and store accounts can be used as to document your positive payment history and help you get a mortgage after bankruptcy. However, it will not be traditionally written to a credit bureau. If you can provide 12 month history of your payments to these 3, this will convince the underwriter to see you as a good risk. - Resist the urge to buy a car This is the best way to rebuild credit. However, your priority is getting a mortgage after bankruptcy. If you buy a car, it will harder for you to qualify for a mortgage because of high interest rate. Buy only if you NEED (not want) and you have enough income to pay for that car, your current debts.
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