No Bad Debt

So, you have decided to purchase a home. Congratulations! Now for the hard part: securing financing. Yes, there are literally hundreds of lenders out there many of whom are clamoring to lend money to you. It is a competitive business one that often works in the favor of the borrower. However, if you have a personal bankruptcy on your record then the prospect of owning a home has gotten a lot dimmer. Lenders will take one look at your credit report and see that big hit against your credit score and find you to be a big risk, perhaps one they don't want to be bothered with. What can you do? Well, flexing your muscles and aggressively seeking what options are available to you is very important in order to find a mortgage post personal bankruptcy.

At one time personal bankruptcy was viewed by lenders as a death sentence when it came to subsequent financing requests by filers. Unless you had already passed the seven year post bankruptcy threshold you could expect a nearly 100% rejection rate from an entire list of mortgage companies. One company could end up approving you with many stipulations and restrictions in place making owning a home more of a chore than a delight.

Fortunately, the competing nature of the mortgage business is revealing a new truth: personal bankruptcy isn't always the showstopper that it once was. Instead, some mortgage companies will examine your entire financial picture to see if things have changed substantially since your personal bankruptcy filing. This may include:

A new job which has raised your income level significantly. Perhaps when you originally filed for personal bankruptcy you were unemployed or your net worth was zero. Today, you have a high paying job that you have worked at for more than one year and some savings to boot. In addition, you are up to date on all of your debt payments.

Distance From Personal Bankruptcy filing. Perhaps you filed for bankruptcy three, four, or five years ago. The longer the time since your filing, the better for you especially if you have taken steps to amend your finances. If so, your credit standing may have improved enough to warrant consideration.

Bigger Down Payment. If you filed for personal bankruptcy, a larger down payment may be required. Instead of 20% down, you may be required to present 25%, 30% or more down. The less of a risk you are perceived to be the better the chance you could secure financing.

Check around ask speak to lenders directly for their policies regarding loans following personal bankruptcy. You could find your dream home waiting for you all because of the extra efforts accomplished on your part.