Buying a Home With Bad Credit - Why a Recent Bankruptcy Will Not Stop You From Getting Approved

Buying a home with bad credit is possible with the help of a subprime lender even if you have a recent bankruptcy or foreclosure. These mortgage lenders specialize in financing home loans for people with poor credit.

Effect Of Bankruptcies And Foreclosures On Credit

A bankruptcy or foreclosure is not the death of your credit. Yes, your credit score will be hurt and you won't be able to borrow from a traditional mortgage lender right away, but you still have options.

A bankruptcy or foreclosure signals a crisis in finances. Lenders understand this, and if there are mitigating circumstances, such as a healthcare emergency or loss of a job, they will make exceptions.

Minimize Your Bankruptcy Or Foreclosure

To minimize the effect of your bankruptcy or foreclosure, include a one-page letter in your credit report stating the reasons for the financial crisis. Lenders want to know that this was a one-time event, not a sign of financial irresponsibility.

While including the letter in your credit report, review all your accounts and be sure they are accurate. After a bankruptcy, creditors may leave open accounts, even when they should be closed. These open accounts can have a negative impact on your credit score.

Appeal To Mortgage Lenders

To appeal to mortgage lenders with a bad credit history, increase your down payment and cash reserves. A large down payment ensures that the mortgage company will receive at least a partial return on their investment if they have to foreclose. A FICO score of 580 will require at least a 5% down payment, and lower scores will require a larger down payment.

Cash reserves ensure that the borrower has enough resources to weather a temporary financial emergency. Mortgage lenders like to see at least two months worth of payments in a savings account, but a higher amount will only help your application.

Online Mortgage Brokers

Online mortgage brokers also make it easier to find financing for people with adverse credit. Through their websites, you can compare multiple finance offers from different lenders, ensuring you get the best rates and terms to buy a home.

To view our list of recommended bad credit home loan companies online, visit this page: Recommended Bad Credit Mortgage Loan Companies Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

---

How to Save Money by Using an Independent Commercial Mortgage Broker

Being a creature of habit can cost you plenty when... Read More

Applying Online For A Home Loan Can Give You an Instant Approval

"Instant Approval For Home Loans" is a common refrain for... Read More

Adjustable Rate Mortgages Offer Alternatives For Home Buyers

When looking for a mortgage to meet your needs, consider... Read More

Homeowners? insurance: The mortgage connection

A home owners' insurance is the cover for the house... Read More

Subprime Mortgage Lenders - Helpful Tips When Getting a Subprime Mortgage Loan

If you have bad credit history, no down payment or... Read More

Do Your Homework - Find the Mortgage That Fits Your Lifestyle and Your Budget

You've been looking at houses for months, and finally you've... Read More

Council Right to Buy Mortgage ? Helping Everyone Have a Home of

"We will help every Council Tenant to become Home Owners"... Read More

Understanding Mortgage Basics

As common as mortgages are, there are a surprisingly large... Read More

Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage

Refinancing your house's mortgage is not the same thing as... Read More

Home Loans and Mortgages ? Tips to Avoid Foreclosure

Today's real estate market is a volatile one; prices are... Read More

Bridging Loan Basics

A Bridging Loan is a short-term loan used as a... Read More

Home Mortgages: Does a No-closing-cost Loan Make Sense for You?

I have heard a number of radio ads and have... Read More

Mortgage Cycling May Be Your Best Bet For Equity Buildup and Investment Real Estate

Mortgage cycling is a system that relies on solid budgeting,... Read More

Home Equity Loans - Are They Right For You?

The bills are out of control and you need a... Read More

Financing the Purchase of Foreclosed Homes

Homes that have been foreclosed can be one of the... Read More

Home Equity Loans - 5 Useful Application Tips

Obtaining a home equity loan does not have to be... Read More

Selling Your Business Note

Before I go further, let me ask a question- if... Read More

2nd Mortgage - Better Than Refinancing

You have probably received refinancing offers in the mail or... Read More

Tips for Finding the Best Agri Mortgage and the Best Agri Loan

The Research Rates of Agri MortgageFirst thing, when finding an... Read More

Applying for a Home Loan

Applying for a home loan may not be the most... Read More

Mortgage Terminology for the First Time Home Buyer

Buying a Home for the first time can be a... Read More

Home Equity Loan Improvements

There's more Regulation Z compliance on the way, courtesy of... Read More

Mortgage Advice To Make Mortgages A Really Smooth Ride

Mortgages are easy as long as you understand them well.... Read More

Home Equity Loans Categories

Fixed Rate Mortgages: These loans have a fixed rate of... Read More

Repayment of Loans ? Lessening the Bitterness of the Process

So how have you planned the repayment? Don't tell if... Read More

Buying a Home With Poor Credit Is Easier Than Ever

Buying a home with poor credit is easier than ever... Read More

Home Equity Loans

A home equity loan allows you to cash-in on the... Read More

Total Cost Of Credit vs Monthly Payments

I read a press release the other day which points... Read More

Guide to Home Equity Loans

Here is a useful guide to home equity loans. A... Read More

Refinance Your Property Online

By refinancing your property online you can take advantage of... Read More

What is a Mortgage?

A mortgage is a loan, usually from a bank, finance... Read More

A New Choice for Home Financing: Correspondent Lenders

When you begin your search for a new home loan,... Read More

Residential Mortgages ? a Step Ahead on the Property Ladder

Doesn't Residential mortgage give the impression that they are a... Read More