Facts About Home Mortgage after Bankruptcy Case
Historically, it was difficult to impossible for a person to obtain a mortgage after bankruptcy. All of this has changed in recent years. In this day and age, even a person who has a bankruptcy on his or her record is able to obtain home mortgage after bankruptcy in many instances.
If you are thinking about filing bankruptcy, purchasing a home and needing a home mortgage is a concern, there are some facts that you do need to keep in mind.
Realities of a mortgage after bankruptcy and lenders
There are many misconceptions about the aftereffects of a bankruptcy case. Many people assume that once you file for bankruptcy, you will never be able to access credit again in the future — at least anytime in the foreseeable future. In point if fact, this is one of some of the misconceptions that surround bankruptcy. I find in my bankruptcy practice in San Diego County that about two to three years after bankruptcy filing that my clients call to get a new home mortgage after bankruptcy
In fact, a growing number of lenders are willing to work with people who have been through a bankruptcy case. There are a number of reasons why a lender is willing to deal with a person who has been through a bankruptcy case.
Once a person has been through a bankruptcy case (depending on the type of bankruptcy that a person has been through), that person’s debt is usually eliminated. A person may end up with some creditors to which he or she is still responsible, for the most part a person no longer has any financial obligations to creditors.
After a person files for bankruptcy, that person cannot turn around and file for bankruptcy again at any time in the foreseeable future. In fact, recent changes in the bankruptcy code have made it far, far more difficult for a consumer to file subsequent bankruptcy cases.
When it comes to a home mortgage loan, a lender at least has collateral in the form of the real estate that is subject to the loan. A lender is more willing to become involved in a secured loan (such as a home mortgage loan) with a person who has been through bankruptcy than in some other type of unsecured asset .
Lenders Who Specialize in Post-Bankruptcy Home Mortgage Loans
The home mortgage market has become extremely competitive in the 21st century. As a result, lenders are having to reach out to a wider range of consumers than at any other point in time in history.
In the 21st century, there are now lenders that are willing to extend financing to people who have been through a bankruptcy case. Indeed, there are now lenders who cater specifically to people who have been through a bankruptcy case and who are in need of home mortgage financing.
In regard to these types of specialized post-bankruptcy home mortgage loans, there are some facts and figures that a consumer needs to keep in mind.
Generally, the interests rates associated with a post-bankruptcy home mortgage loan will be higher than what will be in place in a more traditional or conventional home mortgage loan.
In addition, to higher interest rates, a person who has been through a bankruptcy may have to pay some additional or higher fees when taking out a home mortgage loan than might occur in another setting in which there is not bankruptcy involved.
Monthly payments associated with a post-bankruptcy home mortgage loan do tend to be a bit higher than those more conventional home mortgage loans issued to a person with a better, stronger credit history. (In addition, the length of the loan may be a shorter than would be otherwise available through a more conventional lender.)
Avoid the Sharks
In your own search for a mortgage after bankruptcy home loan, you need to make very certain that you only deal with a reputable lender. Unfortunately, in this day and age, there are many less than honorable operators — in both the brick and mortar world and on the Internet — preying on people who have less than perfect credit.
By making sure that you deal only with a reputable lender, you will make certain that you do not make your financial situation far worse by getting wrapped up with an unscrupulous operator.
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