Title:
Buying A House
After Bankruptcy - Finding A Bad Credit Mortgage
Word Count:
365
Summary:
Buying a house
after a bankruptcy takes a little research to find a bad credit mortgage with
reasonable rates and terms. But it can be done with the help of online lenders.
By comparing financing offers, you can quickly find a home loan with good
terms.
Finding The Right Mortgage
With a credit score less than 650, you will need to apply for subprime
financing with rates slightly higher than conventional home loans. Surprime
financing is offered by traditional lenders, a...
Keywords:
Article Body:
Buying a house
after a bankruptcy takes a little research to find a bad credit mortgage with
reasonable rates and terms. But it can be done with the help of online lenders.
By comparing financing offers, you can quickly find a home loan with good
terms.
Finding The Right Mortgage
With a credit score less than 650, you will need to apply for subprime
financing with rates slightly higher than conventional home loans. Surprime
financing is offered by traditional lenders, as well as specialized bad credit
lenders. To get the most borrowing power, choose an adjustable rate or interest
only mortgage. To further reduce your rates, plan on a down payment of 20% or
more. Large cash reserves or a low debt ratio will also help you qualify for
lower rates. But researching lenders is the surest way to find the lowest
rates. Remember too that with subprime lending, you don’t pay for private
mortgage insurance, even with less than 20% equity.
Before You Start Your Search
Before you start your subprime mortgage search, get a copy of your credit
report. Check it for accuracy of your bankruptcy, and then use it to get loan
quotes. That way lenders won’t have to access your report and further lower
your credit score with unnecessary credit inquires.
Securing Mortgage Terms For The Future
When you start comparing mortgage offers, make sure the terms are favorable for
your future financial goals. If you plan to refinance when your credit score
improves, makes sure there aren’t any fees for early payment. This is also a
benefit if you move before the loan is paid off. Another important factor to
consider are closing costs, especially if you are planning a future refi. Paying
extra thousands for a slightly lower rate doesn’t make sense if you don’t keep
the loan for seven years or more. Even with the lower interest charges, you
won’t see a savings. So take a look at the APR for a general idea of the total
loan costs. But then look at the breakdown of the closing costs and interest
rate to find the financing that works best for you and your financial
situation.