How to Get Mortgage Loans after Bankruptcy

2007-03-08 10:33:40

( Financial )



Bankruptcy is a serious credit predicament. Many believe that a person can never secure mortgage loans after bankruptcy. The only option left for people after bankruptcy is to get loans with high unsecured loan rates from unsecured loan companies.

You can still redeem yourself after bankruptcy. All you need is discipline and determination. So, if you are eyeing on getting a mortgage after bankruptcy, you must be willing to take the necessary actions to rebuild your credit standing. You must understand that it will take time before creditors will start to trust you with a big loan.

Restore your credit

To repair your credit history, you first need to open a savings account. Try to deposit money to your savings account regularly. You don’t have to deposit big amounts. You just need to prove that you can save some money from your income. The timely and full payment of your bills will also help you restore your good credit standing.

Apply for a credit card

When you already have a substantial amount of savings, you can start to apply for a secured credit card. Since this type of card is secured on your savings, you can only borrow a limited amount of money. You can easily get a secured credit card because the risk that you won’t be able to pay your balance is nil.

After maintaining a secured credit card for a while, you can now apply for an unsecured credit card. However, you must use this card wisely. Remember that you only applied for an unsecured credit card because you want to improve your credit score. Only use this card to make small purchases and always settle your balance in full. Don’t ever make late payments or miss due dates.

Start applying for a loan

Many have preconceived notion that after bankruptcy, you can only get loans with exorbitant interest rates from unsecured loan companies. However, if you tried to repair the damage on your credit caused by bankruptcy, lenders will start to trust you with small loans. Try to secure a small personal loan. Your credit score and history will improve tremendously after you have settled your small personal loans on time and with no hassles. This would show loan providers that you are able to make regular monthly payments and are ready to take on bigger loans.

Refinancing after bankruptcy is the next step in rebuilding your credit. Many loan providers will be more willing to approve your loan because you already have a good track record of paying your bills and debts on time.

Once you have paid your refinancing loan, you are now ready to take on mortgage loans after bankruptcy. By this time, you have already made considerable progress in fixing your credit and managing your finances. Many loan providers will not only be willing to provide you mortgage loans after bankruptcy, but will also offer you competitive interest rates for such a loan.


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