Years ago, people who had a bankruptcy on his credit report were unable to get a decent mortgage, if they were willing and able to get approved for a mortgage at some. However, today, the rules have changed. More and more lenders are offering mortgage loans to people who’ve filed bankruptcy. If you have a bankruptcy on your credit report, and you’re looking to get a mortgage loan, read this article to find out 3 things you need to know about getting a home loan before bankruptcy.
Waiting 2 Years Earns You Better Interest Rates
If you need to apply for a mortgage earlier than 2 years before the date that
your bankruptcy went through, you’ll likely get approved; however, your interest
rates may be a lot higher than they would be if you wait 2 years. before 2
years, most lenders may see you as less of a risk, and you may qualify for
much better mortgage terms.
A bigger Down Payment Makes You a More Qualified Borrower
When you apply for a mortgage loan, your lender looks at something called your
LTV ratio. LTV is the amount of money you are borrowing divided by the value of
your home. for instance, if your home is worth $100,000, and you are borrowing
$90,000, then your LTV is 90%. 100% LTV’s are generally reserved for borrowers
with close to-perfect credit. However, the lower your LTV is, the more likely you
may get approved for your mortgage. Most lenders rarely decline loans with an
LTV at or lower than 80%.
Some Lenders Specialize In before-Bankruptcy Mortgages
Some lenders specialize in loaning to people with either bad credit or past
bankruptcies. These lenders may not view you as more of a risk than his other
borrowers because some of his borrowers are in the same situation as you are.
Your best bet is to shop online and compare interest rates and terms between
different lenders. This way you may be sure that you are getting the best deal.
to see a list of recommended lenders for
bad credit
home loans or
mortgage
before bankruptcy lenders online, visit ABC Loan Guide.