Purchasing A Home After Bankruptcy Can Be Easier Than You Think

July 3, 2010

Going through a bankruptcy can be a long agonizing process. You have to wait years before you are able to even think about getting your credit back in good standing. The day finally comes when that pesky bankruptcy drops from your credit report and you are told to wait at least two more years before applying for a home loan. Waiting two long years without any guarantee of being approved for a mortgage after bankruptcy can be disheartening. Fortunately for you this is not always the case.

Times have changed and there is a growing realization of the need to offer home loans for borrowers with imperfect credit even those with a previous bankruptcy. Mortgage programs have been created especially for borrowers who have gone through a bankruptcy. In fact, you can apply for a mortgage even if your bankruptcy was discharged yesterday.

Now you’re probably thinking that although you’re eligible, it will be difficult to qualify. The truth is that qualifying is much easier than you think. The fact that you have been through bankruptcy is not even considered in the evaluation of your credit. Any liens, collections or judgments that appear on your credit report will also not be used in the evaluation of credit and will not need to be paid off.

The most important criteria when applying for a home loan in any circumstance is your credit score. Even with a bankruptcy the one thing that holds the most weight is your credit score. The good news is that with many lenders if you’ve a minimum FICO score of 550 then you’re qualified to purchase a home with a 20% down payment. If you’ve a credit score between 600 and 679 then you could be eligible to borrow up to 95% of the buy price; and with any score above 700, you’re are almost guaranteed to qualify for 100% financing.

With the competitive rates that are available on mortgage after bankruptcy programs, you are can be on your way to owning a home with a mortgage payment that is inexpensive and fits easily within your budget. Along with the traditional benefits of owning a home, such as equity building and tax benefits, you’ll most importantly be rebuilding your credit score.

So now you know that you no longer have to wait to get a home loan after bankruptcy. You can qualify for a home loan this day even if your bankruptcy was discharged as earlier as yesterday. You can also rebuild your credit score and financial life through home ownership. So what are you waiting for? Get out there and starting looking for your dream home right now!

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