The Truth About Bankruptcy And Mortgages

Mar 13th, 2014 | By | Category: Guide

Traditionally people who’ve been through bankruptcy have experienced problems in obtaining a mortgage but in recent years this has all changed and now there are more bankruptcy mortgage lenders than ever.

The impossibility of obtaining a mortgage after bankruptcy would seem to be a thing of the past. There are now a plethora of bankruptcy mortgage lenders on the market.

Many people view bankruptcy as a new start only to see that it is only the beginning of their troubles. Getting any sort of loan or mortgage after bankruptcy can be a real headache. Even after being discharged as a bankrupt, after the usual three year period, you may still find it very difficult to get a mortgage. Regardless of your previous mortgage repayment record, few high street mortgage lenders will consider your mortgage application. From their point of view the danger of lending you money is simply too high. However, do not give up hope too quickly, there are now specialists in the bankruptcy mortgage lender field who’ll consider lending you money. While bankruptcy may remain on your credit record for up to ten years, and may cause higher interest rates, filing for bankruptcy won’t totally prevent you from receiving a mortgage.

How Can This Be?

Many people find that choosing a bankruptcy mortgage lender, even in the present market circumstances, isn’t as difficult as they first think. There are a set of traditional mortgage lenders who simply won’t even consider lending to those after bankruptcy and so they’re fairly easily wiped from the list. This leaves you with a small number of mortgage lenders. The best way to ensure success with these is to work hard to improve your credit rating by paying your debts following the bankruptcy on time. By taking a few simple steps you may find you’re able to get a good rate from a sub prime lender.

Applying for a 2nd mortgage with your current lender may not be the best option. If you obtained your first mortgage with good credit, the lender may not approve your loan application following a bankruptcy. Instead, contact several sub prime lenders. Sub prime lenders approve loans for all credit types. Hence, applicants can get approved after a bankruptcy, foreclosure, repossession, etc.

Furthermore, sub prime lenders usually offer better rates than traditional mortgage lenders or banks. Online mortgage brokers can help you identify a bad credit or sub prime lender. Moreover, brokers offer applicants various loan options. Loan applicants can select the lender offering the best rate and loan terms, as a result.

For those with a record of bankruptcy looking to have a mortgage then it is most advisable to visit a specialist mortgage broker who has specialist experience of the market and can scan for the latest deals and offers. By choosing a good bankruptcy mortgage broker, you ensure that you’ll receive multiple offers from a series of sub prime lenders, enabling you to make an ideal rate comparison.

The question is: what constitutes a good bankruptcy mortgage broker? You need to verify that the bankruptcy mortgage broker is giving you impartial advice and isn’t trying to take advantage of your situation. The best way to do this is intended to ensure that the mortgage broker you use is FSA approved and that you go to several brokers who’ll offer you a series of bankruptcy mortgage lenders for you to compare. You will need to pay special attention to the fees charged.

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