Mortgage - Home Mortgage

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Home Mortgage Bankruptcy

It is possible for a person with a bankruptcy in their record to get a home mortgage. Lenders are willing to overlook a bankruptcy under certain circumstances.

Generally, a lender will overlook a bankruptcy that was discharged years ago. If the bankruptcy occurred more than ten years ago and your credit record has remained good since then it shouldn’t affect your ability to qualify for a mortgage.

A more recent bankruptcy; usually within the past seven years, will affect your ability to qualify for a mortgage. Such a bankruptcy may not stop you from qualifying for a mortgage.

How a bankruptcy can affect a mortgage

There are a number of ways that a bankruptcy in your recent past can affect your ability to get out a mortgage. Some lenders may simply refuse to work with those who’ve had a recent bankruptcy. Other lenders may give you a mortgage but charge higher interest rates.

One way to get a mortgage with a bankruptcy in your history is to look for lenders who specialize in working for people with bad credit. Some of those lenders will work with those who have been through bankruptcy.

Bankruptcy and mortgage 

If you’ve been through bankruptcy and you apply for a mortgage, the mortgage lender will probably want to see a copy of your bankruptcy agreement. The lender will need to see the agreement so they can learn if there are terms that can affect your ability to repay a mortgage.

The lender may change the terms of the mortgage or write in special provisions because of the bankruptcy. Some lenders may require a person who’s had a bankruptcy to come up with a larger down payment.

Bankruptcy lenders

There are many lenders that specialize in making loans to those who have been through bankruptcy. Many of those lenders will help persons who have successfully been through bankruptcy get a mortgage.

To qualify for a mortgage through such a lender you’ll probably have fulfilled all the terms of your bankruptcy agreement. Living up to the terms of your bankruptcy will show the lender that you have ability to comply with an agreement.

Avoiding Bankruptcy

Those who are considering bankruptcy should consider the effect it could have on their ability to get a mortgage. To protect your ability to get a mortgage it might not be a bad idea to look into alternatives to bankruptcy before taking that drastic step.

By contracting your creditors and working with them you maybe to create payment options so bankruptcy is unnecessary. Many creditors will work with you and help you clear your debts so bankruptcy won’t be necessary.

Avoiding bankruptcy could be the best option if you want to take out a mortgage in the near future. Other alternatives to bankruptcy include credit counseling programs.