Bankruptcy and Home Buying :
Filing bankruptcy is the worst financial crisis that one can face. There are several disadvantages of bankruptcy filing including damaged credit scores, poor credit history and inability to qualify for any loan. Obtaining a home loan for such people is almost equal to a distant dream that is almost impossible to realize. However, there are chances where one can obtain a home loan from a lender even after filing bankruptcy.
There are several reasons due to which a person decides to file bankruptcy. Some of these include loss of employment, medical emergency, overspending and increasing burden of debt. There are several lenders specialized in providing loans to customers who have filed for bankruptcy. Most of them are considerate enough to look into situations that have led to bankruptcy. With the increased level of competition in the mortgage market, several online lending firms and financial institutions have come out with entirely different kinds of home loan packages for such people with separate terms and conditions. Most of these packages are also combined with various other attractive offers so as to attract customers. However, one needs to shop around to find certified lenders offering home loans at affordable interest rates.
Persons filing bankruptcy under chapter 7 or chapter 11 can also obtain loans from conventional lenders. However, they need to wait for certain period of time. While the FHA loan requires a 2-year waiting period, other home loans require 4-year waiting period since the discharge date on bankruptcy. This period can be conveniently utilized for rebuilding the credit report and re-establishing credit lines. Strategies like timely payment of bills, having a stable employment history, regular monthly income and avoiding any further credit can be really useful in improving credit scores.
