A bankruptcy or foreclosure filing delivers a devastating blow to your credit score, but it doesn’t mean you have to wait 10 years before you can qualify for a mortgage. Many consumers who have filed for bankruptcy have been able to obtain a mortgage in as little as 2 years from the discharge and 3 years from the sheriff’s sale date in the case of a foreclosure. When it comes time to buy a home, mortgage lenders are more interested in your recovery — what you’ve done since your filing. It won’t happen over night, but here are some tips and things to keep in mind when you inquire about a mortgage with a tarnished credit past.
No mortgage lender is going to ignore the fact that you’ve filed bankruptcy and he or she will likely want to know the cause of the filing. Your lender will be particularly interested in whether the same situation could happen again. Your chances of being qualified are much better if your bankruptcy was caused by a single event such as a loss of employment or a death in the family, than if it was the result of “just spending too much.” If the bankruptcy resulted from a single event, it is important to show your lender paperwork describing the incident, such as the layoff notice or death certificate. You may also want to bring in court documents to indicate when the bankruptcy was filed.
Many people who file bankruptcy swear off credit altogether, however, it is important to re-establish your credit rating. Get a secured credit card or take on some sort of loan — furniture, a car or a major appliance — to demonstrate that you are able to pay your bills on time. Make sure you are making other payments (utility bills, cell phone, etc.) on time as well. You won’t turn things around in a year but your credit score will improve over time.
There’s no need to add to your troubled credit history with errors on your credit report. Get a copy of your credit report from each of the three major credit reporting agencies: annualcreditreport.com
Lenders may be more willing to loan you money if you’ve saved up a considerable amount of money for a down payment. Showing that you have the ability to save money is huge!
When we start talking appraisals it can get confusing. As lenders, we learn what’s important for getting the loan closed. Realtors put their market analysis hat on when they think about them. Neither is correct. Look at it this way, an appraiser is in a profession in and of it’s self. Appraisers are licensed and trained to look at property values in a pretty specific way. On top of that the different loan programs all have different “rules” the appraiser must follow. Then at the end of the day its not a specific formula but a matter of opinion. That’s why we always tell people we could order 5 appraisals on a property and we would get 5 different sets of results. During this event we are going to go over many of the things the appraisers look at, how they analyze the property, and some of the different variables that come into play across different loan programs. If you are looking for a deeper understanding of how appraisers think this is a must attend event.
Here is a list of some of the things we will cover during the event:Visit Jeremy's Blog