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Are Mortgages After Bankruptcy Possible?

Posted on July 30, 2010
Filed Under Finance, Self Help | Leave a Comment

Claiming bankruptcy can be extremely damaging in terms of the impact it can have on your credit rating. Although most bankruptcy candidates don’t boast a stellar rating to begin with, filing a claim can keep your credit in the toilet for up to 10-years, making it nearly impossible to qualify for decent credit. A low credit score can also have an impact on your ability to secure employment or to qualify for a home loan. But are mortgages after bankruptcy impossible? The simple answer is no, though as you will learn in the following article, finding a decent mortgage post-bankruptcy can be extremely challenging.

If you’re interested in qualifying for a mortgage after your bankruptcy claim then it’s important to understand that certain steps must occur before you can expect a positive result. You should never apply for a mortgage or most other types of credit for that matter within 1-2 years of your bankruptcy filing date. The reason for this is that you’re probably not going to qualify for much, and anything you do qualify for won’t be worth dealing with due to strict terms and high interest rates. You’re much better off waiting a couple of years while attempting to repair your credit in the process. You should be doing everything you can to ensure that your bills are being paid on time and in full – every single time. Doing so will allow you to slowly build up your credit score even while in the midst of bankruptcy. Apart from simply paying your bills on time you might also consider setting up a secured credit card that you can borrow against while making on-time payments.

The bottom line is that mortgages after bankruptcy aren’t impossible to find, though it’s important not to rush into things too early on after your claim has been filed. It’s also important to note that even after you’ve waited a couple of years and made strides to repair your credit that the type of mortgage you’ll qualify for will likely come at a relatively high interest rate.

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