If there is a past bankruptcy showing on your credit report you may think that you won t be able to buy a new home with the assistance of a mortgage loan. However, there are bad credit home loans available for those who have undergone a bankruptcy and qualification is not that difficult. There are two issues that will be taken into account by the lender, they ll verify your income and probably request a down payment.
Waiting period
There is a waiting period you ll have to face after bankruptcy has been discharged. Most lenders will require that 3 years have gone by since the discharge before even considering granting you a loan. During this time you should make sure your bills are paid on time and you don t fall behind payments, so when you finally apply for a loan your credit will have improved considerably and you ll be able to get a home loan without the need of money down.
Down PaymentIf you intend to get a mortgage loan before this waiting period, you ll need to meet very strict requirements. You ll have to show that you haven t missed a single payment nor you have late payments at all. You ll also be required to provide a down payment in order to get approved. You ll have to put as much as 10% of the property value down. If you can t provide a down payment it is quite difficult to get approved but there are still other options.
You can always borrow the money from family or friends. You can always repay them since when you get the home loan you ll be able to request a home equity loan as you ll by then own the property. Bear in mind though, that some lenders are reluctant to accept down payments not raised directly by the applicant and you are obligated to reveal this information, so you might as well ask the lender before making such a move
There are programs that can help you with down payment too. These basically provide the seller the ability to help the buyer with the down payment which is otherwise strictly prohibited. You can ask your real estate agent for this information as they are surely able to provide it. Some lenders are also reluctant to accept this kind of transactions, but you can always try.
Another option is to apply for government grants, there are grants specially designed for helping people in this kind of situations. Consult with local offices and with your real estate agent weather you qualify or not for such aid. As opposed to the previous options, government grants do not need to be repaid so they should be the first solution to consider as you could save thousands not only by not paying back the principal but also by avoiding interests.
Bryan Quinn
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