Bankruptcy Home Loans

You filed bankruptcy, perhaps Chapter 13. Now your debts are gone, but the bankruptcy remains as a black mark on your credit. You still have your home, with some equity in it, and you need a bit of cash in order to begin to rebuild your financial life. Can you access that home equity, when you have a bankruptcy on your record? The answer is absolutely yes. There are a number of lenders who welcome such clients in need who have home equity. They can arrange to provide you with a refinance loan with cash out against the home equity.

Companies such as Bankruptcy Home Loans (www.bankruptcyloansinfo.com) provide loans to recently bankrupted homeowners, with this simple step by step guidance: to ensure that credit bureaus have updated your credit report to show the debts have been discharged, a copy of your bankruptcy discharge may be necessary; be prepared to provide loan underwriters a great deal more detail regarding your financial picture than would be required without the bankruptcy; and to remain as confident as any borrower, despite the bankruptcy. Lenders who provide post-bankruptcy loans have the view that a bankruptcy does not make the loan applicant a bad person, just a person who has had a difficulty for various reasons that are now irrelevant. Nevertheless, interest rates on such bankruptcy home loans will be higher than usual loan rates, because a recently bankrupt applicant is seen as a higher risk.

To get a post-bankruptcy home loan, you should take steps to repair your marred credit record, by establishing new accounts and maintaining a good payment history. Building up funds in a savings account and opening a new credit card account, even if it is a pre- paid credit card account, is essential in rebuilding credit. Doing these things will bring your credit score higher, and you will want your score improved as much as possible in order to get better terms and approval on a bankruptcy home loan.

Working with a mortgage broker who has a long track record of helping with bankruptcy home loans is a good idea, as they will know the ins and outs of the process. If you have not only filed bankruptcy but have also had your prior home foreclosed, then you may be wanting to secure a new home. If so, then the credit rebuilding suggestions are to be followed. Some studies have been done on the effect of bankruptcy: the reality is that you can qualify for a home loan within 18 to 24 months after a bankruptcy has been discharged. FHA policies on post-bankruptcy loans are simple and straightforward. FHA will make loans to bankrupt applicants about 24 months following the final discharge, provided that tax liens have either been paid or payments arranged with the IRS; that three years have passed since a foreclosure; and that there are no unpaid judgments. Making as large a down payment as possible will reduce the monthly payment amounts and though the interest rate may be higher than you would like, in a few years you can refinance for a lower rate.

It would be a good idea to hold off on buying a new car until you are able to secure your bankruptcy home loan, for intense scrutiny will be on your expenditures and ability to manage your finances. You want to proceed with restraint and caution, keeping your debt to income ratio as low as possible. The bankruptcy freed you from the burden of accumulated debts, and you can prevent such a situation from occurring again. Lenders want to see evidence of such reasonableness and restraint, so keeping your shopping urges in check is the thing to do. You can get that little sports car later, when either your bankruptcy home loan on your equity or your new home purchase loan has been closed, with a history of on time payments made. Thus, within 24 months you can actually get a loan or purchase a new home, and within 36 months be revived with a clean credit record. Congratulations, you are one of many successful people who have survived the bankruptcy experience and even become more successful than before. Now, go apply for that bankruptcy home loan, put on a good movie, and have some popcorn. Relax, there IS life after bankruptcy and home loans are a part of that life.