When To Apply For A Mortgage After Bankruptcy

Bankruptcy can be a long and time consuming process, but when all the paperwork is finalised, and your bankruptcy discharge date comes round, it is time to start looking to your financial future and getting your status back on track. Applying for a mortgage after bankruptcy is something that needs to be timed carefully in order to ensure your application is accepted.

Depending on the type of bankruptcy you filed for, it will stay on your credit report for 7 or 10 years, 7 years for a Chapter 13 bankruptcy and 10 for a Chapter 7 bankruptcy. This doesn’t mean you have to wait this long before you can begin your application process though, this is just the formality of how long a bankruptcy stays on your credit record for. You can start repairing your credit rating as soon as your bankruptcy discharge date has passed, so you can build up a record of making regular payments and being able to manage your debt. Using something such as a credit card from a specialised high risk lender will help you do this, but you must ensure you never spend more than you can afford to pay off as these kind of cards will come with high interest rates.

When it comes to applying for a mortgage after bankruptcy, most lenders will want you to wait at least 2 years before they will consider your application. However there are some lenders who may consider your application after 18 months if you have managed to build up a good payment history over that time. This may come with a catch though, as many lenders that are prepared to take creditors on a short time after they come out of bankruptcy will specialise in high risk lending and this brings with it higher fees and interest rates on any money you borrow. It is for this reason that it really is best to wait for at least 2 years following your bankruptcy discharge date before you begin looking for lenders that will consider your mortgage after bankruptcy application.

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