Bankruptcy does not mean that you cannot buy a new home as you have filed for the bankruptcy case already. There are different options available like mortgage companies and government-backed programs which deal with bankruptcy. You may also get tired of searching about the mortgage loan providers after the bankruptcy, and then you can have the proper guidelines here on getting the mortgage loans so that you can also buy the dream house.
Mortgage vs. Bankruptcy
The bankruptcy case is divided into 2 major parts which include filing for chapter 7 and chapter 13. Well, any mortgage company which deals with the bankruptcies looks for those who have filed chapter 13. In chapter 13, it is believed that the debts and loans must be paid according to the capability of the bankrupt person whereas the filers of chapter 7 have more financial stress and it may take longer to precede their financial condition. Moreover, the filers of chapter 13 get a lot of ideas and insights about credit management when credit counseling is taken by them. The financial solvency is improved with this for making sure that they can pay the mortgage in any condition. It may seem that chapter 7 filers will have to go through a very tough situation. They will be on the process up to ten years from the filing date but chapter 13 will be removed within 7 years in any condition. This also means that chapter 13 relieves the filer from financial stress within a short span of time.
Guidelines for a general mortgage after the bankruptcy
The people who have filed for the bankruptcy, for them this issue are really very complex. They have to pass the critical time as they are in the financial bad condition. No one will partner with them for any business issue. Credit Card Company may not put much importance on your bankruptcy but if you want to buy the house then it can be a big issue as this needs a lot of money. The mortgage companies which deal with bankruptcy have to ask some questions where you can work hard for improving your condition.
- Is there any issue with the payment of the debts?
- Is the condition of bankruptcy beyond your control?
- Can this bankruptcy case happen in the future?
You need not worry if you have a case of bankruptcy and it can not deter you from your future growth. Different lenders also look for some requirements as you have bad condition financially. You may also pay a high amount or get a credit card but the deal can be different in terms of the mortgage loan. The mortgage loan is also a big issue due to the big amount. The lenders also have different requirements expecting from you. So, in the waiting period, the credit score can be improved. Well, there is a lot of space by which you can explain your bankruptcy condition to ensure that you are not in a financially bad condition.
Show the bankruptcy cause
Bankruptcy is considered a horrible event in anyone’s life. But the reality may be different with the different people. Some bankrupt people have just one factor to get bankrupt whereas, on the other hand, there are a large number of factors to get bankrupt where the bankrupt person is in a very complicated and big financial disaster. The bankrupt person takes a long time in improving their financial position. If there is just a factor that is causing the issue of bankruptcy then it is not a big issue. Those who have faced bankruptcy cases due to one factor then this will not take a long time. In this, the financial capacity is better even if one is declared bankrupt. So, if you want to take a mortgage loan from the Mortgage Company, then it is important to show the related papers about the bankruptcy causes.
This will help you in getting the mortgage loan from these companies. The paper work can be submitted about the current financial activities which indicate that this will not happen in the future.
Rebuild your credit score
In the bankruptcy case, credit card spending is another issue. But you can decide that you won’t use the credit card any more. You may have existing credit card spendings like a student loan, car loan, furniture loan, and various other major appliances. In such cases, you can go for the secured credit card which provides the loan at simple terms and conditions. Another important issue is the credit card score. The credit card score helps in explaining a lot about many financial activities like a mortgage loan. You must remove the credit card in any means. You can pay utility bills, pay the bill, and other bills in the proper manner. You should not do late in the payment as this can take your credit score down. Even if you have bankruptcy status, a good credit score will help you get any type of loan you want.
If you have any variation in your credit score from the credit report, you must not ignore them in any way. There could be any mistake where it can be defended that you actually have a good credit score. You should keep yourself up-to-date with the credit report and keep it up to date for any future loan, such as a mortgage loan from a company that provides mortgage loans. Generally, in the case of payment plans, a bankruptcy filer may well have a waiting period of 1-4 years or more. In that time, a bankruptcy filer can focus on improving the credit score only by following some cost-effective plans.
Live within your life
You step up by your own means. As you file a bankruptcy case, you have to be so cost-effective to ensure you’re not going to face any bankruptcy case in the future. There really is no end to the demand for human nature. When they’re in the process of purchasing anything, the best option is number one. But in order to get the best one also needs to pay the best price.
In the same manner, when you’re going to buy a house in the case of bankruptcy, you have to be a little bit cautious that you will not buy a house that costs a lot of money. So you might think small if your ability goes outside of your scope. You can go as you pay basis so that you don’t face any kind of event like bankruptcy.
You can search for some friendly mortgage companies
You need not worry because all lenders aren’t just for those who were not able to file for the bankruptcy. The very first prerequisite of mortgage companies may be that they do not provide mortgage loans to the bankrupt person. However, many lenders support bankrupt people.
So you need to do a little research for a mortgage company offering a lower interest rate mortgage loan. It should also be observed that some mortgage loans provided by a company may offer mortgage loans at higher interest rates. It’s just because of the bankruptcy. So you’re supposed to go and look for a friendly mortgage loan company.
Mortgage Companies That Deal With Bankruptcies
There are a lot of options for getting mortgage loans for buying the dream house. There are different mortgage companies and government-backed loans which deal with bankruptcies.
Government-backed loans
It is believed that the first time house buyers who have a bankruptcy case or bad credit. There are different regulations and plans by which they can get loans if they have a bankruptcy case.
USDA loans
There is the same guideline as to the FHA programs. However, if you will have to wait two years for Chapter 13 and Chapter 7, you will also be eligible after the payment on time for 1 year. The difference may be convenient in the case of bankruptcy under this program.
FHA loans
FHA loans are one of the ways of getting a mortgage to be a homeowner even if you have a bankruptcy case. FHA has 2 guidance documents for chapter 7 and chapter 13. When you apply for a mortgage loan under the FHA program, you have to wait two years after you file a bankruptcy in Chapter 7.
But on the other hand, Chapter 13 may require 12 months of payment and you have to wait for this period. Moreover, you ought to submit a written declaration of approval by the court that will guarantee a loan from FHA.
Peoples bank
Peoples Bank Mortgage is recognized as a wholly-owned subsidiary of People Bank in Mendenhall, Mississippi. The bank offers mortgages and is one of the leading mortgage providers in the USA. The 3 S’s are the scope, service, and stability of this bank’s definition
It’s possible to get a mortgage after bankruptcy. This bank assists you to be the owner of your home even if you filed for bankruptcy. There are some steps to get this bank’s loan approved. This bank provides a wide range of loans for different types of loan programs. For making sure they work with various financial areas where you are considered eligible for this loan. You may be taking some steps for making it easier.
- First, you need to seek advice from the mortgage consultant regarding your plans, and this consultant will describe everything else in detail.
- Credit review is yet another factor to be considered and is free as this bank conducts a credit review program which includes verification of accounts, updating credit inaccuracies and ways for improving credit scores.
- The third step is the application and you must submit a complete application form. The bank team will guide you in making the correct application.
- The loan specialist will help in processing your information and justify the data you provide.
- There could be a lot of conditions that could make you in trouble. However, they’re going to try to authorize your loan in any condition.
- Finally, you are indeed very close to the loans and some formal approval activities will be finished. In this way, you’re just going to stay with this bank because of your mortgage loans.
There are few benefits to go for this bank, which can definitely benefit you to get mortgage loans for buying your dream home. So those features are-
- Payment is very small
- Choices to cash out
- The interest rate is low.
- Laxer Terms and conditions
- Low down payment
- Ability to skip 1-2 months of payment
- Pay off the bankruptcy plan much sooner
Conventional loans
There are different programs sponsored by the government which is also owned by the government. The conventional loans are under Freddie Mac, Ginnie Mae, Mac, and Fannie.
There are some specific guidelines for providing the loans –
- Under Chapter 13 -The waiting period must be 2 years from the date of discharge and 4 years from the date of dismissal, subject to extenuating circumstances.
- Under Chapter, 7-The waiting period must be 2 years or 4 years with extenuating circumstances for those that are outside the control of the borrower.
Apart from conventional and government loans, some private lenders also have laxer terms and conditions to obtain mortgage loans. Some private lenders can also offer you loans. It doesn’t matter what your bankruptcy case was.
Prime Equity Mortgage
Prime Equity Mortgage is one of the most trusted and best sources of real estate finance. if you want to buy a house, and you are having a bankruptcy case, then you don’t have to worry as you have a prime equity mortgage, recognized as mortgage brokering, for people wanting to buy commercial or residential real estate. But if it’s about your bankruptcy filing, you can feel free to go for this company. Some of the services you can believe on –
- No waiting period for bankruptcy
- 90 percent of the LTV ratio allowed
- Offer a great refinancing program
- Cash-out facilities are provided
- But it can only lend in California
First National Bank of America
First National Bank of America is the platform for those who have filed for the bankruptcy case. It believes that you have the right to grow even if you get ignored from all the sides as you have the bankruptcy case. There are very simple terms and conditions for those who want to get the mortgage loans from the bank.
- Mortgage loans with no waiting period
- 80 percent as the highest LTV ( ensure payment of 20 percent as a down payment)
- Good for people with bankruptcy issues
Acc mortgage
Acc mortgage is the financial solution that ensures a mortgage loan for people facing bankruptcy. Your home is waiting or you’re going to be the owner of your home even if you’re bankrupt. It’s so easy to get a loan from this mortgage company. There are no tough rules and regulations to get ACC mortgage loans. There are some components
- No requirement for credit score
- Good for people with financial problems
- New Mortgage instantly When Bankruptcy gets discharged
Angel Oak Mortgage Solution
Angel Oak Mortgage Solution is one of the world’s leading non-prime lenders. This mortgage company, which deals with bankruptcy, is a place where you have trust in them. Angel Oak is going to offer loans in different countries. They have varied mortgage lending programs depending on the different cases of the borrowers. You could even make sure that their programs and terms and conditions are in place to ensure that you have a mortgage. Here are some of the features of Angel Oak Mortgage Solution.
- Offer a loan even if the credit score is below 500
- 85 percent of LTV is allowed
- Quick application after 1 day out of bankruptcy
- Good for people who have a case of bankruptcy
Conclusion
Bankruptcy is the condition that really makes someone’s life troublesome who files it. They have to face a lot of conditions and questions for getting any type of loan or financial assistance. It can be really hard to get a mortgage loan after the case of bankruptcy. Then some research can help you to get the exact solution whenever you need a mortgage loan if you want to buy a home. So, it is discussed how you can get the mortgage loan very easily after the bankruptcy case.
