Bankruptcy and your Mortgage

A bankruptcy filing delivers a devastating blow to your credit and FICO score, but it doesn’t mean you have to wait 10 years before you can qualify for a mortgage or a home loan. Many consumers who have filed for bankruptcy have been able to obtain a home mortgage,  after it has been discharged for at least 2 (two) years. With Wilmington Mortgage there is NO increase in interest rate because of the bankruptcy. You are still entitled to the lowest interest rates possible. You got a fresh start financially with the bankruptcy right!

While credit card companies may care about what happened before you filed for bankruptcy, many mortgage lenders are more interested in your recovery — what you’ve done since your filing and discharge. It won’t happen over night, but here are some tips and things to keep in mind when you inquire about a mortgage with a tarnished credit past:

Demonstrate good money habits now. From the point of discharge of the bankrupty, and for the next 2 years, you need to restore your credit. In other words, if you obtain a gas credit card, or store credit card like, Sears or JC Penney, you need to make sure that you make all payments on time and as aggreed. Pay your rent or present Mortgage on time. By making payments on time you will go along way in increasing your FICO credit score. The secret is NOT to develope any negitive credit habits. The bankrubtcy laws provide financial relief, and after 2 years as far as home mortgage loans are concerned it never happened, but only as long as you pay any debts on time.

Dispute any credit report errors. There’s no need to add to your troubled credit history with errors on your credit report. Get a copy of your credit report from each of the three major Credit Reporting Agencies: Equifax, http://www.equifax.com; Experian, http://www.experian.com; and TransUnion, http://www.tuc.com. If you encounter any errors, inform the CRA in writing what information you believe to be inaccurate and request deletion or correction.

For any additional information or questions on how bankruptcy may affect a home mortgage,  please give me a call Phil Throckmorton toll free 888-696-1660 or send me an email  phil@wilmingtonmortgagegroup.com