Bankruptcy Mortgage (Yes There is Such a Thing)
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One can get rid of multiple debts by filing for bankruptcy. However, one’s credit rating is adversely affected and it becomes very difficult to obtain a bankruptcy mortgage. Not many people know that even after bankruptcy and a bad credit rating it is possible to apply for a mortgage through certain methods.[br]
Bankruptcy Mortgage: How to Obtain it?
Once you file for bankruptcy, your credit scores fall by 350 points. Whether you file for Chapter 7 or Chapter 13, your records reflect bankruptcy for 10 years and 7 years, respectively.
One can establish credit worthiness by obtaining a secured credit card to improve one’s credit score. A cash deposit of $500 can be used as the credit line to collateralize the secured credit card.
Home Mortgage After Bankruptcy: One can get FHA (Federal Housing Administration) insured loans after bankruptcy. However, these loans require one to have a good credit rating. A lower debt to income ratio is also required to ensure that the borrower can easily discharge his debt obligations. Homeowners are also required to make payments on all accounts on time for 12 consecutive months in Chapter 13 and for 24 consecutive months in Chapter 7 bankruptcy cases.
You can obtain Veterans Administration insured loan after 2 years of filing for bankruptcy if you are an eligible veteran. Consumers can get a mortgage loan if bankruptcy was filed under compelling circumstances. This will be on the assumption that you obtained discharge after one year of the date when you applied for the loan. Also, you should have the ability to rebuild your credit score since the discharge.[br]
Refinancing Mortgage After Bankruptcy: You can also opt for a refinancing mortgage at lower interest rates after bankruptcy. This is possible if you filed for Chapter 13 because under this chapter you can save your home from foreclosure. The adjustable rate mortgage loan can be refinanced through an FHA insured mortgage to a fixed rate of interest. This again requires a good credit rating and lower debt to income ratio.
Second Mortgage After Bankruptcy: In some instances, debtors intend to obtain a second mortgage, such as a home equity line of credit or a home equity loan. This is done to pay out Chapter 13 obligations using the proceeds of the mortgage. However, once you have filed for bankruptcy, it becomes very difficult to find a creditor who is disposed to offering a second home mortgage loan.