Winning Lender Approval Even After Filing For Bankruptcy

Filing for a bankruptcy is serious business. One simple action such as this will impact your credit rating for ten years to come. Yet, even though you may have filed for bankruptcy, there are some lenders who will still try to extend their services to you and your family.

When you do decide that you want to try and get a mortgage after your bankruptcy, know that on average you should wait a year or two at the very least. A lot of lenders won't even talk to borrowers who just got out of a bankruptcy, since they see it as poor responsibility that should teach the borrower a lesson in managing debt.

Proving responsibility can be done in as little as a year, so long as you can obtain a credit card that was built for consumers with poor credit. If you can pay off your credit card without a single mistake over 12-24 months, lenders will see this as a lesson learned. While some will still shun you, your prospects will open up.

Even if you could get approved in as little as a year, you might not want to agree to a mortgage so soon. Consider waiting at least two years so that you can pool enough money together to get a large deposit, as well as a fund for emergencies. Your first bankruptcy should never be repeated, and having a "rainy day" fund reserved for emergencies will help keep history from repeating itself. Matching the deposit in a savings account is good practice.

Having a cosigner will greatly help you in your plight. A cosigner that has a great credit rating, and agrees to be responsible if you can't make payments, will tie lenders over who are still skeptical. Finding a cosigner is another story completely, as you will need to find someone that trusts that you have learned a lesson in managing money. Otherwise they will be liable for the cost of the mortgage.

If you can settle for a high interest rate, getting a mortgage loan before the two year anniversary of your bankruptcy shouldn't be too difficult when following the mentioned tips. The question you must ask yourself is whether or not you are fine with paying a higher rate now, when you can save money by fixing your credit score first and then applying for the mortgage loan.

In Conclusion

Going through a bankruptcy is stressful enough, as if you didn't have to worry about still getting another mortgage to finance a home in the future. Stick it out, and in time you will be able to once again apply for a mortgage to get a new home.