Real Estate Information

How to Get Financing after Filing Bankruptcy


If you're thinking about buying a home but have declared bankruptcy in the past, don't give up hope. There are still ways for you to be able to find a loan, even if your credit history is less than sterling.

Lenders make various kinds of home loans, normally graded from "A" all the way down to "D." The more problems that show up on your credit report--slow pays, late pays, or even bankruptcy--the lower the grade of loan you'll be able to qualify for. If you're employed and have a relatively good income, you'll get better terms, even though you won't qualify for a "Grade A" loan. The longer you've been at your current job, the better, because it shows stability.

Here are some general rules about the qualifications lenders look for before giving consumers the various grades of home loans:

To qualify for an AA loan, lenders must see no late payments or any other difficulties when they look at your credit history for the past two years. First, we'll look at the top of the line loans, all in the A grade category.

To qualify for an A+ loan, you can only have one late payment in that two-year time period. An A- loan is available to borrowers whose credit report shows two or three late payments, and have at least two credit cards. Borrowers in the A category will normally be qualified for all the various perks that lenders offer, such as low interest loans and low down payments.

But if you've had a bankruptcy in the past, you're choices are more limited, and you'll generally need a larger down payment.

For instance, a grade B loan can be obtained by borrowers who've been at their jobs for a reasonable length of time in as little as 18 months after declaring bankruptcy, assuming that they've been able to reopen at least one line of credit during that time and kept it current. Usually the lender will require 15% down, and the best interest rate the borrower can generally get is 6-7%.

A grade C loan will require good, steady employment, and may be available within a similar time frame as a B grade loan. The interest rate is generally higher, currently at about 8.5%, and the down payment requirements are considerably higher. For instance, a lender will normally require 20% down on $300,000 house or 40% down on a $500,000 home.

You'll need a significant amount of down payment to qualify for a grade D home loan, as well, and the interest rate will normally run between 9.95-10.7%, depending on your overall credit score. If you're employed and your credit score is above 500, you can put down as little as 30% on a $300,000 home or 45% on a $450,000 house. If you're self-employed, however, you'll need 45% down just to buy a $250,000 home.

If you're hoping to purchase a home, talk to your local lender to see what their criteria are for their various grades of loans. Even if you've had a bankruptcy in your past, that doesn't mean you can't buy a home. It just means it may take some time, you'll need to establish a strong employment history, and you'll need to save more money for a down payment than if the bankruptcy hadn't occurred.

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Forget what you've been told about credit. Get the Credit You Need to Buy Real Estate. Visit Real Estate Credit Help Center: http://www.recredithelp.com


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Forbes

What To Expect From Real Estate Tech In 2018
Forbes
The real estate tech sector is being shaped by shifting market conditions and changes in consumer behaviors. Every year, my company tracks and analyzes emerging trends in real estate tech to better understand technology's impact on the industry.



Forbes

The Beginner's Guide To Commercial Real Estate Tech: What ...
Forbes
Seven industry experts clarify the true meaning of the buzzword and how it gained popularity in the industry.

and more »


Business Insider

Real estate M&A in 2017 has eclipsed pre-financial crisis records ...
Business Insider
Real estate mergers and acquisitions are having a record year so far, with $387 billion in announced transactions worldwide.

and more »


Forbes

Why Seattle Real Estate Will Maintain Its Hot Streak
Forbes
Seattle is one of the hottest real estate markets in the country and we're betting on Seattle to maintain growth for the foreseeable future. Limited inventory coupled with significant development, high demand and a constantly evolving marketplace are ...



Palm Beach Daily News

Real estate firm forges link with Colony hotel in Palm Beach
Palm Beach Daily News
Guests at The Colony at 155 Hammon Avenue in Palm Beach now have on-site access to real estate services offered by Berkshire Hathaway HomeService ...

and more »


CNBC

Charleston mansion and penthouse expected to break real estate records
CNBC
... the records for the most expensive house and most expensive apartment ever sold in Charleston. "When you come to Charleston, you fall in love with Charleston," said Fisher. For more record-breaking real estate check out "Secret Lives of the Super Rich.




Entrepreneur

5 Reasons Why Real Estate Is a Great Investment
Entrepreneur
Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and ...

and more »


pharostribune.com

Cass real estate broker retires
pharostribune.com
It was in real estate that he really hit his stride, and in 2001, he founded Galloway, Murray & Scheetz real estate agency with Malinda Galloway and Georgie Murray. They've been the area's top-selling real estate office since its founding and Scheetz ...



Herald Times Reporter

Manitowoc real estate transfers and homes sold: Nov. 19, 2017
Herald Times Reporter
To determine the purchase price of the real estate, divide the transfer fee by 0.003. For example, a transfer fee of $250 would indicate a purchase price of $83,333. Real estate sold at a price of $100,000 would have a transfer fee of $300. OTHER NEWS: ...


Google News

home | site map | Blog |
Portland Oregon Real Estate Listings | real estate investing | real estate in greece | for sale by owner in atlanta | House for sale: Louisville KY
Exchange Links Here | Links page |
© 2006