Buying a Home with Bankruptcy

February 12th, 2009

Filing bankruptcy can cause plenty of stress for a person. Besides clearing your debts and making a new beginning, you might be apprehensive about your eligibility of purchasing a home after a bankruptcy. Mortgage companies and online lenders now provide home loans for people whose credit report shows bankruptcy. Few lenders are willing to give you a loan immediately after your bankruptcy has been paid off.

Today you can purchase a home right after bankruptcy. There are various reasons why a person can file bankruptcy. Unexpected loss of a job, unforeseen medical bills, and unmanageable credit card debt can result in filing bankruptcy. The mortgage lenders have developed special loan packages and terms for people who have filed bankruptcy in the past. Lenders do not suffer major losses while authorizing a home loan after bankruptcy. As your home acts as a security for the loan, the lender is assured of recovering their money.

Filing bankruptcy and purchasing a home today are not mutually exclusive events. Both traditional and online lenders offer a good interest rate and payments that you can easily pay. If you have filed Chapter 11 or Chapter 7 bankruptcy and are not sure whether you can get a home loan, talk to a lender immediately who deals exclusively in offering mortgages after bankruptcy. Interest rates today are at the lowest than they have been in decades. Even though you have filed for bankruptcy, you can easily procure new home loan and get a better interest rate. Online lenders and mortgage companies are vying to get your business. Do not let your old bankruptcy stop you from getting the home of your choice.

If you had filed for bankruptcy and want to buy a home, there are many offerings and loan products that can meet your needs. Lenders will immediately sanction your loan and offer you great deals on your mortgage. Few lenders will ask you to let some time go by before giving you a new home loan after a bankruptcy but other lenders can give you a loan within a day of paying off your bankruptcy. Today is the great time to go for a mortgage, though you may have declared bankruptcy some time back.

Zero Down Mortgage Loans

February 12th, 2009

Many people prefer to get a home loan with 100% financing or do not want to make any down payment. But if you are thinking about going for this type of loan, refer to these points while considering various mortgage options.

To be eligible or 100% financing on a purchase mortgage loan, it is necessary that your credit score must be minimum 600 or more. If it is in the range of 600-650, you might have to apply for 100% finance through a subprime mortgage lender.

For a credit score more than 650, you can be eligible for the mortgage from most mortgage lending companies online and get the loan approved.

If you have credit score is in range of 580-600, you may have to make a down payment of at least 5% to get the loan from a subprime mortgage lender.

A mortgage loan with 100% financing can mean higher interest rate. At times, a good substitute is to go for an 80/20 loan, where there are 2 mortgages of which the first mortgage has lower rate and the second mortgage carries higher interest rate. The advantage of this type of loan is that it does away with PMI insurance that can cost $100 or more for each month, based on the amount of loan.

Besides ask for quotes for 100% financing and quotes for 95% financing, where you make a down payment of 5%. Find out if the savings on the interest rate are substantial to make the down payment.