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Steps to Consider For Qualifying For Mortgage After Bankruptcy

Steps to Consider For Qualifying For Mortgage After Bankruptcy

Author: Alvin Clavines

Bankruptcy can be difficult especially the long process that comes with it. But after the bankruptcy discharge has been issued, it is important to create good credit again for future purposes. You would want to boost your chances of qualifying for a mortgage after bankruptcy, it would be better if you can correct your past mistakes first, learn from them and take necessary steps to rebuild your credit. Because your credit rating has taken a heavy blow and you will be much less an attractive prospect for potential lenders, rebuilding your credit as soon as possible is a crucial part in recovering from bankruptcy. You have to understand that the type of bankruptcy you filed will decide the amount of time it stays on your record. When you filed for Chapter 7 bankruptcy the amount of time it will stay on your record will be ten years. Chapter 13 bankruptcy will stay on your record for seven years. Although there is an amount of time that creditors will see that you have a bankruptcy discharge on your record, it does not mean that you will not qualify for credit. First thing to remember for qualifying for mortgage after bankruptcy is to not apply for another credit. The last thing you want to avoid is getting in debt again after bankruptcy. And as you will find out, it would be hard for you to obtain credit for around a year following bankruptcy discharge. Most lenders will want to wait for at least two years before they allow their bankruptcy discharged client to apply for a mortgage. In some cases though, you can be able to apply for a mortgage eighteen months or so. This will all depend on your financial status between the times of your bankruptcy discharge date until the time of your mortgage application. The second step is to start new credit accounts. This may sound scary, but if you do not make the same mistakes as what you did before everything will go well. You will need to open new credit accounts to boost your credit scores. New credit accounts may involve opening new major credit card, store credit card, automobile loan, and so on. And once you have secured obtaining these types of cards, you will need to do three things. These are, to always make your timely payment, maintain low balances, and payoff the balance every month. Lenders will see that you are financially responsible if you handle you cards well and maintain regular and well-timed payments. Being financially responsible will allow you to qualify for an unsecured credit card. Also, within two years you may have the privilege to get a mortgage or auto loan. If you are thinking of applying for a mortgage earlier than the two year period, you will have to search for a lender that can help you approve mortgages for people that had bad credit standing. Do not be surprised if you find out that this type of lender requires larger deposit and have high interest rate, because that is how the way it is. But if you really want it sooner than two years, then this type of lender is your best choice.About the Author:

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