Mortgage Loans After Bankruptcy - How to Rebuild Credit Following a Bankruptcy

While bankruptcy remains on your credit for a maximum of ten years, and can lead to a higher interest rate on auto loans and credit cards, filing for bankruptcy is not impossible to get a home loan. Fortunately, there are ways to get a mortgage after bankruptcy. Here are some tips that will put you on the road to homeownership. When is the right time to apply for a MortgageAlthough you can receive a mortgage loan on the day following a bankruptcy, you can expect to pay a very high rate of interest. A high interest rate can increase your monthly payments by several hundred dollars. If you can afford this amount, the application of a home loan can be a wise choice. However, if you were to wait at least 24 months after the bankruptcy, may be able to receive a reasonable rate of interest. Establish New Credit AccountsWaiting two years before applying for a mortgage loan is ideal because you are given enough time to rebuild or reestablish credit. If you apply for a loan before you open an account credit, mortgage lenders are reluctant because they have not shown any improvements.On credit on the other hand, if you were to get at least three or four new credit account, pay the balances time, and never missed a payment, mortgage lenders will notice improvements in credit. So, have confidence in his ability to repay future loans. If possible, groped for the payoff credit card balances each month, or carry the balances low. In this way, you avoid huge financial burdens. How to choose a lender for home loans? Choosing a lender for a home loan after a bankruptcy is not difficult. True, traditional lending institutions and companies rarely guides decent discount for individuals who have filed bankruptcy. However, if you improve your credit score, you may be able to get a good rate from a first lender.Sub Subprime lenders specialize in offering loans to individuals with "less than perfect credit." Also, if you submit an application through a mortgage broker, you will receive multiple offers from several sub prime lenders. Comparing the rates and terms is useful because you can select the financing package with the deal. Here are our top recommended Bad Credit Mortgage Lenders. Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.