If you recently filed for bankruptcy, you may wonder if you can get approved for a home loan. You may also wonder if buying a home after a recent bankruptcy is a good idea for you.
While bankruptcy can make home loan approval difficult, it is still possible to get a home loan approval. In fact, more and more bad credit loan programs are emerging. Sub-prime lenders are focusing more on helping people with bad credit achieve homeownership. This is mostly happening, bankruptcies are still on the rise and there are an increasing number of people with bad credit seeking home financing.
Here are some reasons to consider home ownership after bankruptcy:
1. Increase your credit score – When you make your payments regularly, you improve your credit rating. After the prepayment penalty period ends, you should be able to refinance your home loan for a much lower interest rate. After your bankruptcy has been canceled for more than 2-3 years, it should be much easier to qualify for a home loan with a lower interest rate.
2. Greater equity in your home – If you are only paying rent, you are wasting your monthly payments. When you own a home, over time, the value of the home increases and you are working toward owning an asset.
3. Get a home equity loan to consolidate debt or get the extra cash you need. – Once you have purchased your home, as soon as 6 months later, you may be able to get a home equity loan on your home and consolidate any other debt you may have since your bankruptcy or debt that cannot be included in your bankruptcy. Taxes and student loans will not be canceled in bankruptcy. You may also want to use the extra money to invest in a business venture or for necessary home improvements.
To see our list of recommended online lenders for bad credit home loans,
visit this page:
Online poor credit mortgage lenders.