Attaining homeownership is a great goal. If you have a good credit rating, reaching this goal is easy. On the other hand, if you have a few credit blemishes or filed a recent bankruptcy, you may have to delay homeownership until your credit situation improves. Several lenders specialize in bad credit mortgages, and offer loans to people after bankruptcy. However, before accepting an offer, consider the following points.

When was the Bankruptcy Discharged?

There is no mandatory waiting period for obtaining a mortgage after bankruptcy. Those who are eager to purchase a home may get a loan immediately following their discharge. Unfortunately, this may not be the best plan. Mortgage interest rates following a bankruptcy are outrageously high, which may greatly increase your mortgage payment. In fact, mortgage and credit experts may encourage you to wait at least 24 month before applying for a home loan. By doing so, you have the opportunity to receive a comparable low interest rate on your home loan.

Have You Established New Credit Accounts?

To rebuild your credit, it is important to open new credit accounts and re-establish credit. Because of a low credit score following a bankruptcy, some lenders, or credit card companies will be hesitant to approve your loan request. Thus, a secured credit card may be your best option. If applying for a secured card, you are required to provide a down payment. For example, if you offer a $500 down payment, then your credit limit will be $500.

After acquiring a credit card, maintain current payments. Keep balances low, and try to payoff the balance each month. A good payment history will increase your credit score. Soon, you will qualify for unsecured credit cards. Try and get approved for three new credit accounts. As your credit improves, so do your chances for getting a low rate mortgage.

Choosing a Good Mortgage Lender

Depending on your credit rating, you may get approved for either a prime or sub prime loan. Prime mortgage loans are offered to individuals with excellent credit. On the contrary, sub prime loans are intended for those with lower credit scores. Prior to applying for a loan, request an online quote from a mortgage broker. Based on your credit information, a broker will provide multiple quotes from sub prime or prime lenders.

View our recommended Mortgage After Bankruptcy Lenders.

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