It Is Possible To Obtain A Home Loan After Bankruptcy
Many people who have filed for bankruptcy have the opinion that they will have to wait until the action has been removed from their credit report before they can apply for credit. The reality is that many companies have no trouble issuing high risk, high interest credit to recently discharged bankrupt and obtaining a home loan after bankruptcy is a little harder, but it is possible. Typically, a few credit card companies are attracted to those who have been discharged from debt and while their cards carry a higher interest rate, people are willing to accept them to start rebuilding their credit rating.
Typically, following bankruptcy most lenders are shy about approving loans especially receiving a home loan after bankruptcy and rebuilding credit can be a time-consuming process. It may take years before all of the bad notations have been removed from a credit report, but once a bankruptcy has been discharged some creditors see it as a good thing, knowing it will be at least seven years before that person can file bankruptcy again.
By selecting one or two low limit credit cards and making prompt payments is the first step in being able to receive a home loan after bankruptcy. In fact, many lenders after a year or so of the individual rebuilding their credit and showing a desire to keep their financial nose clean can often receive car loans and loans for other purposes.
Unsecured Loans May Be At A Premium
Many lenders will help provide secured loans for those recently discharged from bankruptcy, knowing that if the person defaults on the note they can repossess the property and garnish wages to recoup their loan. However, getting a home loan after bankruptcy can be more difficult because most home loans will be for considerably longer than the seven-year period required before a person can file bankruptcy again.
However, in applying for several credit cards as well as other loans is actually detrimental to receiving a home loan after bankruptcy. Every time a person applies for credit and a report is requested, it places a notation on their credit report. The report does not show if the credit was approved or not and can lead some lenders to believe they have too much credit and will be a risk. Limiting the number of applications and only applying for loans that are likely to be approved is the best way to build up your credit before applying for a home loan after bankruptcy.
