Buying a Home After Bankruptcy

If you have filed bankruptcy and are looking for home financing, there is light at the end of the tunnel. There are factors that are very important if you are looking to buy a home with bad credit. The two factors required to get a mortgage loan are verification of the income and the down payment that you can afford.

After filing bankruptcy, most creditors wait at least 2 years after your bankruptcy has been discharged - before they will consider lending you the money. After the two year period is over, you should not have a problem getting your home financed. Actually, you can also get 100% financing if you have paid most of your bills and other dues on time since the discharge of your bankruptcy.

If you don't want to wait till two years after your bankruptcy has been discharged and want to get a mortgage loan sooner than that then your repayments must be perfect. You can not delay your monthly dues and you should also be able to make a little down payment. This will make your case stronger. If you have enough money to make 4-6% of the down payment, this should be enough to get approved.

There are a number of ways to get a down payment for your mortgage loan besides saving the money in the bank. Here a few tips to help you arrange a little down payment:

Borrow some money from your friends or relatives.

Once you have financed your house, you can usually take out a second or even a third mortgage, up to the total value of your house and then, you can start repaying your relatives. Remember that lenders can have a few reservations about where the down payment is coming from and you will be required to disclose this information before you can get your house financed. If you are not totally honest here, it could very well be considered as defrauding a lender and that has its own risks and can cause you serious problems.

Neighborhood Gold/Nehemiah Programs

You can get a lot of help with these are down payment assistance programs. Basically, these programs are there to help the seller in helping you with your down payment.

Receiving a down payment from your seller is an illegal act but, through these programs, it is legal to get down payment assistance from your seller. There are more down payment assistance programs which are more like grants and need not to be repaid or paid by anyone. To find out more about them, you should search the term "down payment assistance" on the internet.

401K Plans

You can also cash out your 401k or some other investment you made and just like in the first example, you can repay yourself with the second or third mortgage after the loan has been closed.

Buying a house after bankruptcy is not impossible anymore. In fact, modern day mortgage industry has made it far easier than ever and it keeps getting easier as our mortgage industry evolves. You can also save a lot of money and also get some extra cash by refinancing your mortgage. You can find more information on how and when to get your mortgage refinanced here on credit and mortgage index and you can also find tools that will help you calculate mortgage refinancing.