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Bankruptcy & Credit Rating:
Filing personal bankruptcy should not be done lightly. After filing bankruptcy, it will stay on your personal credit rating for up to 10 years. Bankruptcy will act like a warning flag to your potential lender about you.
Lender will charge you higher interest rates than they normally would to even out the risking of your loan. For example, if a loan would normally cost 6%, the lender may charge you 8%. As time passes, your bankruptcy will become less and less important to a lender.
How To File A Home Loan After Filing Bankruptcy:
Most lenders and financial institutions want to see 3 things when considering a loan to someone with bankruptcy history:
- A steady income
- A down payment
- 2 years of on-time bill payments
A steady income is probably the most important item out of all three. The other two items are somewhat negotiable. If you make a responsible bill payment, some lenders may provide a loan to you sooner. Some home borrowers with a down payment and a steady work history may secure 100% coverage on a home loan.
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