Mortgage After Bankruptcy - Is That Possible

Dec. 15, 2011 - PRLog -- If you have declared personal bankruptcy, financial establishments may still consider your application for a mortgage loan. However, your bank may require that you rebuild your credit first and then approve your application. Mortgage brokers will also make sure that you meet the requirements before approving your application.

The first step in this direction is to save some money. This is necessary because you need to have enough money for the down payment. You can opt for a savings account, featured with a high interest rate, and deposit your savings there. How much you have to save depends on the property you want to buy. You should be realistic and set the right goals. You may work your way up by first starting with a small house or flat. It will take you about 2 years to save for a property priced at $150,000 if you manage to save $100 a week.

Rebuilding credit is important, and you can obtain a secured credit card to this purpose. The credit limit of your credit card will be equal to the deposit you make. Secured credit cards show on your credit report in the same way as other credit cards. Here, it is important to pay your bills on time and avoid late payments on student loans, credit cards, and car loans (if you were extended any). Late payments will cause your credit score to plummet.

A friend or relative can cosign for you if you do not meet the loan requirements, but make sure you can repay the loan. Otherwise, this is likely to put a strain on your relationship with them.

A good time to apply for a mortgage is when your loan or credit card has been reported to the credit bureaus. Then you can expect to be offered a decent interest rate on your mortgage loan. This will not happen overnight but within 2 years after the bankruptcy discharge date, which is the time you need to save for a deposit. It is possible to apply for a mortgage loan earlier, but you will be offered a higher interest rate, paying more in interest in the long run.

There are two main players to check with if you want to apply for a mortgage loan. These are mortgage arrangers or brokers and mortgage providers or lenders. If you are an existing client, it is recommended to apply directly with your financial institution. Brokers specialize in finding mortgage loans for their clients and have working relationships with many lenders. They will help you choose the right mortgage for your financial situation, assist with your mortgage application, and offer advice. Keep in mind that your mortgage broker has to work harder because you are considered high risk by most lenders. Hence, you may be charged a higher fee.

Learn more about auto loans in Canada (http://www.yourloan.ca/auto-loans--credit) and how to apply for a auto loan - http://www.yourloan.ca/loan-articles/auto-loans

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