If you’re worried you won’t be able to get a mortgage loan after a previous foreclosure or bankruptcy, don’t panic just yet! Today, we’lldebunk the common myths about mortgages and share how you can still buy the home of your dreams—no matter what your financial history looks like.
Can I Get a Mortgage Loan After Foreclosure or Bankruptcy?
Despite what many people believe, having a foreclosure or bankruptcy on your credit report doesn’t automatically disqualify you from getting a home loan. There are no rules that will permanently prevent you from getting approved for a loan simply because you had a setback in the past. In fact, if you know the correct steps to take, buying the home of your dreams may be easier than you think.
How Do I Apply for a Mortgage Loan After Financial Setbacks?
Many lenders are willing to work with applicants who have experienced financial setbacks in the past. They may require a larger down payment or higher interest rate, but it’s still possible to be approved for a loan. To increase your chances of approval, keep the following tips in mind:
Focus on improving your credit score (it’s never too late to start!)
Do your research—know what you’re up against and become familiar with the standard waiting periods after foreclosure or bankruptcy
Organize financial documents ahead of time, including (but not limited to) credit report, pay stubs, tax returns, and bank statements
Review your credit report for any erroneous accounts or delinquency issues
Be honest on your loan application and explain any extenuating circumstances that led to foreclosure/bankruptcy (a bankruptcy-explanation letter may help, too)
By doing so, you may be able to expedite the standard waiting times post-bankruptcy and purchase your new home sooner rather than later. Plus, you’ll show the lender that you’re taking responsibility for past mistakes and working towards cultivating a better financial future.
Don’t let foreclosure or bankruptcy shut the door on your dreams of homeownership. Start the prequalification process right now and see how much money you can get for your new home!
Comments