Use these tips to help you on your path to buy a home after bankruptcy:
Make all your payments on time.
The most important thing you can do after bankruptcy is start rebuilding your credit. This means making all of your payments on time.
While you most likely won’t be able to apply for any new credit for at least a year, you can start with a secured credit card. This type of card requires a cash security deposit that serves as collateral as well as your credit limit. Buying a few things each month on your card, then paying off the balance, will help you rebuild your credit score.
Explore mortgage options.
Depending on your income and how well you’ve been able to repair your credit, you could be eligible for a conventional 30-year loan two years after your bankruptcy is discharged.
Certain mortgage types, including government-backed FHA loans and VA loans, are more lenient when it comes to credit requirements, even after a bankruptcy. With FHA and VA loans, you may be eligible to buy a home after bankruptcy with a modest credit score in as little as one year after your bankruptcy is discharged. NLC Loans provides a variety of mortgage options for those who have gone through a bankruptcy.
Save for a down payment.
With a bankruptcy on your credit report, be prepared to face a much higher interest rate for your mortgage, at least in the beginning. You can offset the costs with a larger down payment. While you’re rebuilding your credit, use this time to save for a down payment as well. Lenders look favorably on larger down payments, as it shows you’re less likely to walk away from your mortgage.
Check with us.
While you may face some extra challenges, it is possible to buy a home after bankruptcy as long as you meet certain criteria. To learn more about your mortgage options after bankruptcy, contact a personal mortgage advisor at NLC Loans today toll free at 1-877-480-8050.