bankruptcy and mortgage modification

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Buying a house after a bankruptcy takes a little research to find a bad

credit mortgage with reasonable rates and terms. But it can be done

with the

help of online lenders. By comparing financing offers, you can quickly

find

a home loan with good terms.

Finding The Right Mortgage

With a credit score less than 650, you will need to apply for subprime

financing with rates slightly higher than conventional home loans.

Surprime

financing is offered by traditional lenders, as well as specialized bad

credit lenders.

To get the most borrowing power, choose an adjustable rate or interest

only

mortgage. To further reduce your rates, plan on a down payment of 20%

or

more. Large cash reserves or a low debt ratio will also help you

qualify for

lower rates. But researching lenders is the surest way to find the

lowest

rates.

Remember too that with subprime lending, you don’t pay for private

mortgage

insurance, even with less than 20% equity.

Before You Start Your Search

Before you start your subprime mortgage search, get a copy of your

credit

report. Check it for accuracy of your bankruptcy, and then use it to

get

loan quotes. That way lenders won’t have to access your report and

further

lower your credit score with unnecessary credit inquires.

Securing Mortgage Terms For The Future

When you start comparing mortgage offers, make sure the terms are

favorable

for your future financial goals. If you plan to refinance when your

credit

score improves, makes sure there aren’t any fees for early payment.

This is

also a benefit if you move before the loan is paid off.

Another important factor to consider are closing costs, especially if

you

are planning a future refi. Paying extra thousands for a slightly lower

rate

doesn’t make sense if you don’t keep the loan for seven years or more.

Even

with the lower interest charges, you won’t see a savings.

So take a look at the APR for a general idea of the total loan costs.

But

then look at the breakdown of the closing costs and interest rate to

find

the financing that works best for you and your financial situation.

View our recommended Mortgage After Bankruptcy Lenders.

Carrie Reeder owns ABC Loan Guide, an online resource with information about Bad Credit Mortgage loans and Home Equity Line of Credit lenders.

Bankruptcy Attorney, Mortgage Modification Lawyer in Paoli PA 19301

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