Can I Qualify for a Mortgage After Declaring Bankruptcy?

Bankruptcy is one of the most difficult things that anyone can go through. And it can make it seem as though applying for a mortgage after declaring bankruptcy is an impossible dream that will never come true.

The short answer, however, is that you can still qualify for a mortgage after declaring bankruptcy. But it is important to understand bankruptcy, what it is there for, and what it means for you to declare.

Better Understanding Bankruptcy

Declaring bankruptcy is never, ever easy. It signifies financial failure of the highest order. But the thing about bankruptcy is that it doesn’t mean you’re a bad person or that you can’t rebound.

Bankruptcy is there for those who have gotten into a serious financial pickle and have no other way out. This often happens when debt mounts for one reason or another and paying back creditors is no longer a feasible option.

And while declaring bankruptcy is not something that should be considered lightly, it isn’t the worst thing in the world. Declaring bankruptcy can allow someone in serious financial peril to get out from underneath it and begin again.

Which brings us to applying for a mortgage in the wake of declaring bankruptcy. Here is what you need to know if you plan to purchase a home with a bankruptcy on your record.

Applying for a Mortgage after Declaring Bankruptcy

Applying for a mortgage after declaring bankruptcy is not only possible, it happens all the time. When your bankruptcy is discharged, it means the chance to begin anew. All of your debts have been cleared away and you are given a new opportunity to reestablish your credit. It also means the beginning of accumulating financially beneficial assets.

If you find yourself in the position to purchase a new home and have a bankruptcy on your record, it is still possible to find a good rate. The big banks may make it difficult to borrow at the rate you feel comfortable with, but they are not the only answer.

When looking for a home after declaring bankruptcy, start with an independent mortgage broker. This is a great way to establish what you can truly afford and the best possible rates available for that purchase.

Believe it or not, you can actually qualify for today’s best mortgage rates after declaring bankruptcy. To do this, you have to meet the following criteria:

  • Your bankruptcy has been discharged for at least two (2) years
  • You have established credit for two (2) years of that duration
  • Having the ability to put a five percent down payment on the property on which you wish to buy

Keep in mind that this is the easiest route to go after declaring bankruptcy. If you are still within that two year discharge window, it can still be possible to obtain a mortgage. To do this, you will likely need a larger down payment and may also need to pay a much higher interest rate.

Getting Professional Help

You can begin the process of budgeting for a home with a few different tools. An online mortgage calculator is one tool that can help you to understand what you can afford. A pre-approval can help you know what you can actually be approved for.

These tools will help you to find out the financial limits that you have and can help you find a property in your ideal range. Super Brokers can aid you throughout this process or put you in touch with a trusted mortgage broker.

With a free consultation , you can begin the process of moving forward after declaring bankruptcy towards owning your own home. With some due diligence, patience, and proper professional assistance, you can still own the home you’ve always dreamt of.

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