By Ed Jeffry And Luke Currier
In the past, traditional mortgage lenders have automatically
rejected people who had declared personal bankruptcy. Many
potential home-buyers or exiting homeowners felt they must
at least seven to ten years after a bankruptcy to be eligible
for financing. This is a common misconception.
While some people declaring bankruptcy have had trouble
managing their money, a larger number of those declaring have
simply experienced unfortunate events. Americans have been
filing bankruptcies at record-high levels over the last many
years, especially last year.
Though a bankruptcy is certainly a blemish on a credit report,
it does not necessarily disqualify a borrower. Recognizing
sometimes bad things happen to good people, some select loan
officers are becoming more willing to take a calculated risk.
Some lenders use a scoring system to determine whether
potential borrowers are a worthwhile risk. Unfortunately,
bankruptcy gives an automatic low score. However select
are beginning to look beyond the scores and look at the
individuals in need.
Instead of waiting two or four years after being discharged
from bankruptcy, some mortgage professionals are willing to
give a home loan much sooner. Those who have declared Chapter
bankruptcy liquidation may be eligible for a loan in as little
as one day after discharge, and those who have declared
13 may be eligible for a loan even while they are still in
Another common misconception is that a previous bankruptcy on
your credit report will require you to have a large down
payment and pay extremely high rates and points. There are
currently programs available with no down payment required and
with very attractive rates and points.
Some lenders are even pre-qualifying buyers for a loan, saving
time and making the home-buying experience easier and more
efficient. When a buyer pre-qualifies they will have the
advantage of greater negotiation power.
No matter what the situation, select mortgage professionals
have a program that will work for the buyer with a bankruptcy
history. If a buyer cannot get approved, there are customized
plans that can re-establish credit to help the buyer become
mortgage ready, ensuring homeownership in the future.
Because of new options, bankruptcy no longer needs to stand in
the way of getting a home loan. With the help of more creative
lenders, those who have experienced financial difficulty will
have an easier time getting a mortgage.
About The Author: Luke Currier and Ed Jeffry are experts in
mortgage lending. They specialize in working with homeowners
who have had a bankruptcy or other credit challenge achieve
financial security through home ownership. Visit their website
at www.Chapter13Experts.com for more information or
them direct at 925-983-3127.