5 Smart tips to apply for a mortgage after bankruptcy

If you have recently filed bankruptcy and want to apply for a mortgage loan, then you should know that it will not be an easy task. However, this doesn’t imply that it is impossible to qualify for a mortgage after bankruptcy. If you have filed bankruptcy on 22nd July 2008, then you can reapply for a mortgage on or after 22nd July2010. This means that you have to wait for 2 years after bankruptcy. This is the standard rule. After 2 years, you might be able to get 100% financing. However, lenders will give you that amount of money only when you have built your credit post bankruptcy.

Tips to apply for a mortgage after bankruptcy

If you want to apply for a mortgage after bankruptcy, then here are some tips that can help you:

1 . Pay on time: In order to qualify for a mortgage after bankruptcy, you will be required to have a good payment record. This implies that you need to pay all of your bills on time post bankruptcy. You should also keep the credit utilization ratio within 30%. This will help to improve your credit score gradually.

2 . Review your credit report: The information in a credit report is not always correct. Therefore, order a copy of your credit report and read it in detail. If you find any wrong information, then you ought to report it to the credit bureau as soon as possible. The credit bureau is supposed to correct it within 45 days. You should review your report time and again. This will help you to have a decent credit
score.

3 . Affordability: You need to determine whether you can afford the mortgage loan. Evaluate your income and expenses honestly. Check whether you can really make the mortgage payments. You must not apply for a mortgage loan if you can’t afford to make the payments. This will increase your troubles.

4 . Down payment: If you want to get a favorable interest rate on the mortgage loan, then you’ll be required to put down huge amount of money on the home. A 3%- 5% down payment will be sufficient.

5 . Debt-to-income ratio: Lenders will check your debt-to-income ratio before approving your loan request. Therefore, try to wipe out all of your debts before applying for a mortgage.

Finally, you should shop around. You can visit various websites and compare the interest rates offered by different mortgage lenders. Several online mortgage lenders work with clients who are applying for a mortgage after bankruptcy, so you can work with them.