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mortgage loan after bankruptcy
By | January 9, 2008
The problem that most people face when contemplating whether to file for bankruptcy is the thought of what happens after it. Beginning life after bankruptcy can be difficult and lenders are not very willing to advance loans to people with poor credit ratings. However these days things have become a bit easier. Lenders are more open to advancing loans to people with bankruptcy on their credit report. If you’re looking to get a mortgage loan after bankruptcy there are a few things you need to consider:One thing that you should remember when applying for a mortgage loan after bankruptcy is that though people might still be willing to advance money to you, the interest rates will be high. However once two years have passed since you filed for bankruptcy the rates fall. Within two years of filing for bankruptcy interest rates are very high. Once the two year period is over lenders consider you less risky and advance money at a lower rate.Another thing is that the higher the down payment on your loan the more likely you are likely to get it. Lenders use what is called a Loan to Value ratio. Here the loan amount is divided by the value of your house. If your LTV is less than 80% you are highly unlikely to get a loan.There are certain lenders who cater specially to people who have been through bankruptcy. These lenders also do not charge a much higher interest rate as you are not perceived as being a risk. This is because all their clients have bad credit histories and you are part of that business.Thus life is not over after bankruptcy. It is certainly tough the first couple of years but being a little smart about your money and looking out for all available options will help you tide over the rough patches.
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