Home Mortgage After Bankruptcy?

Edwards Finance > Loans

Q. We recently filed chapter 7 and it will be discharged at the end of January. Has anyone had any experience with trying to buy a home after bankruptcy? Are there special lenders who deal with this(do you get stuck w/high interest and have to have large down payments)? How long after bankruptcy do you need to wait before even trying to obtain a loan? This seems like it's probably hopeless to be able to buy a home after filing bankruptcy. Any advice is much appreciated.

A. The answer(s) are varied and multiple.. The most direct answer is: yes, you can purchase a home right after filing BK. Yes, there are 'higher' interest rates associated with a BK. How high? It depends on several factors such as re-established credit, cash in bank, 401 k's, IRA's etc... How high are the rates, varies from a low of 8.5% to 13.5%, pending on situation again. As far as the down payment goes, from 10% up to 40%. Each case is different, yet the standards are the same. So you need to have your case evaluated on its' merit. Generally, you can expect to pay a rate between 10.5% and 11.75% with a down payment of 15%. Each state is different too. So without knowing all of the details, this is as specific as I can get. Assuming that one's morggage was never delinquent before, during, or after the BK, will this help in getting better terms faster? What about a previous mortgage that had a perfect payment history and was paid off a few months prior to the BK? Is a strictly unsecured case viewd as less severe than one which involved a mortgage of foreclosure? I believe that many can handle mortgages responsibly, but screw up bad with credit cards. It would be nice if the mortgage bankers could make the distinction! (the same also applies to auto financing).

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