After the colossal financial collapse, many consumers in the US are compelled to file bankruptcy. Once you file bankruptcy you can discharge your debts and start afresh. Many people after discharging debts plan to buy a home but they fail to get a home loan from traditional lenders. Therefore, if youâ€™re planning to buy a home, then look for a foreclosed home from the lenders at low rates after a bankruptcy discharge. But are you wondering whether you can take out a mortgage loan immediately after a bankruptcy discharge? The answer is yes, getting mortgage loan after bankruptcy isnâ€™t impossible. But before you apply for a mortgage loan make sure you keep the following points in mind to get a loan on affordable terms after a bankruptcy discharge.
Here are a few steps that can help you get a mortgage loan after a bankruptcy discharge:
1. Before applying for a credit card, make sure you review your credit report. If you find any discrepancies in the credit report, then contact the credit bureau to remove the incorrect entries. Check your credit report every month after a bankruptcy discharge. If you find your credit report showing debt as "Open" or "Late" after a bankruptcy discharge, then call your creditors to provide documentation of your filing. Make sure your credit report is updated and your erroneous entries are removed before applying for mortgage loan.
2. Try to make your payments on your existing bills on time, as it will help you reestablish your credit report. When you make your payment on time, it can help to establish a pattern of responsible credit usage. If you responsibly use your credit card and show your credit worthiness, then you can get mortgage loan on favorable terms.
3. Make sure that you have a stable income before you apply for a mortgage loan. When you have stable income, the lender is assured that you can pay back the owed amount on time. A stable employment history can help you get a loan on affordable interest rate, despite your bankruptcy discharge showing on your credit report.
4. If you make a considerable amount of down payment, then you can get a mortgage loan on favorable terms. Therefore, you are required to save money so that you can put forth a sizeable amount of down payment. Making a huge down payment can help you get a mortgage loan on lower interest rate. Remember, you need to make a down payment of 20% according to the purchase price.
Therefore, these are the four crucial points that you are required to keep in mind when you are planning to apply for a mortgage loan after a bankruptcy discharge.