Bankruptcy is not good for your credit file; it can stay there till the next seven years. However, this should not discourage you from getting home loan. There are so many reasons or so many things that can make bankruptcy to happen.
Some of it may never be your cause, once you are discharged, getting a home loan may be an issue. Since this stay on your credit file for an unprecedented seven years, this can put your dream of owning that home on hold.
Luckily, there are some specialist lenders that are ever willing to give you a home loan after Bankruptcy. Although, this can come with higher fees and rates, but there are some amazing options that can really help you either refinance an existing loan or get into a home loan without having to wait for a long period of time.
How to rebuild a positive credit history
If you are a victim of discharged bankruptcy, then there is no point applying for another home loan, until you have discussed with your lender. Discharged bankruptcy has a lot of repercussions. When you are declared bankruptcy by a competent financial body, your right towards getting some financial aids is limited.
Sometimes, a financial institution may manage your affairs till the period of bankruptcy is over. But when we talk of discharged bankruptcy, we are merely saying that you are no longer bankrupt. Usually, bankruptcy lasts a minimum of three years, it can be extended.
This exclusively depends on the trustee and certain conditions. This will have a negative effect on your credit report, because most reporting agencies will keep seeing it for about seven years, and most of them will actually act on it.
When you are declared bankrupt, your spending power will be limited and will be closely monitored. Some of your properties and assets can be sold, and you can’t be given the opportunity to hold certain public positions or manage a company, and you are not permitted to travel overseas, unless you are permitted by your trustee.
What to look for when applying for a home loan
If you have a bad credit history as a result of bankruptcy, then you really need to be cautious when it comes to managing your finances. Then, you need to be more prudent when it comes to applying for a home loan.
When you are selecting a lender, you should go for the one that is interested in offering loans to discharged bankrupts. However, make sure the lender has a solid track record and reputation.
This means that you will get considerable fair terms, and there are high chances that you will be given approval. You need to be extremely cautious, because there are so many questionable credit lenders out there, some of them may be interested in offering you unreasonable rates, so you should watch it.
Another thing you should watch is that you should never apply to more than one lender at a time. If your application is denied, don’t go to apply to another lender immediately.
Keep in mind that every application you have submitted irrespective of the reason always displays on your credit file, so your potential lenders can see it and act on it. But this will not be a problem if you apply for a loan once in a while. Avoid serial borrowing, most lenders frown at it.