Bankruptcy in the credit report was a dreaded thing for the lenders. There was this time when the lenders would never like to lend anyone with a bad credit resulting from bankruptcy. In fact the lenders would often look at them as the people who are never honest into making payments towards their debts and hence making any lending decision for them would involve a lot of risk.
So, bankruptcy would mean an end to the financial well being of an individual. It is not something which would leave you within a few days only. In fact bankruptcy would remain on your credit report for not less than 7-10 years. During this period the lenders would look at such applicants with suspicion and would stay away from making any lending decisions for them.
One would think of getting unsecured loans, loans of small amounts which would be repaid in a short time span. However, if it was those old days getting them would have been an uphill task but looking at the current circumstances , where one can find a huge number of applicants with bad credit and those with a bankruptcy in their records ; lenders themselves have introduced loans which would fit in the qualification criteria of those who have a bankruptcy in their report.
The scenario in the mortgage sector is not very promising. With the recession setting in lenders is left with little choice to keep their lending standards still high and stringent. There are loan products which have been designed for people with bankruptcy in their credit report. For the lenders this often means greater profit and they are willing to offer these loans to people in the current times.
Remember, while bankruptcy will always have negative connotations, certain applicants are still able to get vital funding through loans and mortgages. But what are the mortgage loan options on offer?
Bankruptcy often has a lot of the negative aspects associated with it and is never seen as something good by the lenders. However, there are different criteria which can help in getting the mortgage:
1. Considering Bankruptcy Mortgages
One of the easiest and the most important loans that one seeking mortgage would look at after bankruptcy is the bankruptcy mortgage. These loans are specifically designed to meet the needs of the people seeking mortgage after bankruptcy.
For those who had to cope with bankruptcy in the past, these loans are surely a great relief. In most of the cases their debts restructure in a way that they have some amount of disposable income with them. This would allow them space to repay their new loans they take and even make them eligible for the new loans.
2. Considering The FHA
FHA loans have been serving many and are the options for the low-income earners. For those who are ignorant and do not know much about the different options available in the market for the mortgages after bankruptcy, FHA loans do offer some respite but these are never the best ones to exist. This is because of the fact that the FHA loans have their own constraints. These personal loans for people with bad credit are offered for a limited amount and are not for all the kinds of properties you might select.
However, in spite of these FHA loans are the kind of loans which one can get with ease. These loans being backed by the government are offered at very low interest rates and very flexible terms. It is for this reason that most of the people are interested in getting them.
3. Considering Regular Mortgages
Nowadays with the increased number of cases of bankruptcy, foreclosure and bad credit there are all the chances that getting loans can be much easier. A lot of individuals go in for the regular mortgages. These loans are offered by the private lenders but often come with higher interest rates and severe terms and conditions. Getting them might still be easier for the people faced with bankruptcy.
On the lender’s part, they will look at the reasons behind the bankruptcy. Getting deeper into your finances, they will try and analyze and then decide the kind of interest rates they can decide on giving you.
With such loans, you should be ready with a higher down payment almost to the tune of 20%. This the entire deal can be really expensive for you.
However, all the efforts to get a mortgage after bankruptcy can pay you back if you stick to a regular payment schedule. This will help you increase your credit score further and hence will impact your credit worthiness positively.