Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter

 

redhotloantips fat loss


Recent Bankruptcy? It's not impossible to obtain a home loan.

Written by: Clinton Bengtson

Because the new bankruptcy laws go into effect on October 17, 2005, more Americans than ever are filing for relief using the federal bankruptcy laws. The vast majority are simply overextended and cannot possibly repay the obligations they have open.

However, for many filers, the opportunity of homeownership may be possible immediately after discharge. Ironically, some those that would not previously qualify for a mortgage do qualify after a bankruptcy.

How is that possible? An example of this is Dave Olson (a fictional character). He earns $4,000 per month, spends $1,000 on rent,$250 on car payments, and $2,000 on credit card minimum payments. The DTI* (debt-to-income) ratio of this person is 81.25%. Since his credit score is low (600 middle FICO), the only option is a mortgage that requires full documentation. Most of those loans require a DTI of 50-55% maximum.

The Chapter 7 bankruptcy is filed and Dave gets a discharge. He reaffirms his auto loan and still rents for $1,000/month. However, now his monthly debt is much lower (($1,000+250)/4,000=31.25%).

The bankruptcy has actually increased his chances of obtaining financing for a purchase. Many times, the credit score is the same after the bankruptcy as prior to filing (unless creditors report incorrectly). By filing simple dispute letters with the three credit bureaus, those discrepencies can be cleared up within a few months.

It makes sense that borrowers are most ready to borrow for home purchases after bankruptcy because they cannot file Chapter 7 for 6 years, their obligations are lowered, and the property being purchased is secured. That means the lender can repossess the property if payments are not made timely.

There are some things to keep in mind if you are purchasing a home after a recently discharged bankruptcy.

1) A downpayment isn't always necessary, but it will improve the rate.

2) Most people opt for an Adustable Rate Mortgage (ARM) since the rates are much lower than a fixed and they plan to refinance in 2-3 years.

3) Most of these loans have a prepayment penalty that matches the fixed period of the financing.

4) Most lenders require cancelled checks or verification of rent paid not later than 30 days in the past 12 months.

5) A foreclosure before the bankruptcy is hard to overcome. A foreclosure as a result of the bankruptcy usually doesn't count.

Everyone's situation is different. To ensure the best service, be sure you contact an experience mortgage originator that will take the time to listen to your situation and explain all the possibilities. It shouldn't cost you anything to inquire.

About the Author

Clinton Bengtson has been a mortgage originator (loan officer) for almost 5 years. Prior to that, he was a CPA working at several large companies. Clint Bengtson has helped hundreds of people become homeowners that were declined at other lenders. Experience is important and can mean the difference between approved and not approved. Visit his website at http://www.mnmortgage.net for more information.


Other Related Articles:

Car Loans After Bankruptcy - Tips To Getting Approved
A car loans after a bankruptcy is one way to help build back your credit history. In fact, once your bankruptcy closes, you can apply for a car loan the next day. To get approved with the best rates for your car loan, follow these tips. Review Your...read more

The Truth About Home Refinance Loans (Avoiding Potential Pitfalls)
Submitted by: John Lee WorldWideReviews http://moneyemployment.worldwidereviews.com/HomeRefinance.htm Online Home Mortgage Refinance Companies. You've probably heard the advertisements on the radio or seen them on the...read more

Getting A Loan If Your Credit Is Bad
When you're learning about something new, it's easy to feel overwhelmed by the sheer amount of relevant information available. This informative article should help you focus on the central points. Bad credit is the worst type of credit that...read more


Return to Home

468x60

Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map