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Mortgage After Bankruptcy
You Can Get A Mortgage After
Bankruptcy

Getting a mortgage after bankruptcy to buy a house is not only possible, it is done almost
every day. The borrower has to be patient, and has to have a strategy.

Credit Has To Be Re-built.

The first thing the lender will look at is your credit. You have to demonstrate that you have
learned from your pass mistakes and that you are paying your bills on time.

You need to know what is on your credit reports. Not just one report, but the reports from the
three leading credit reporting agencies. Each year you are allowed to receive a free credit
report from each agency. Take advantage of these offers. You should know what is on the
reports before you discuss your loan with a lender. This gives you the opportunity to have any
mistakes corrected, and any missing information updated and included. For example, if an
account shows open and overdue when in fact it was included in the bankruptcy, you should
bring this to the attention of all the credit bureaus.

This is where your patience will be put to the test. Be prepared to write dozens of letters to all
three credit reporting bureaus, Transunion, Equifax and Experian. You have to be specific
and address each discrepancy in the reports. Have your documents to prove your case and
send copies along with your letters. Always keep the original copies. You can rebuild your
credit in one to two years.

Repay your debt on time each month.

There should be no "new" negative issues on your credit report after the bankruptcy. It is
expected that you will have limited credit after bankruptcy. The companies that extend credit
might be department stores through their installment loans. Even in these situations the
amount might only be one or two hundred dollars.

Consider using a secured credit card from your bank. Start with a small amount of two
hundred dollars. After you have used the card for about six months ask for a credit card with a
three hundred dollar limit. Use this card for six months without any blemishes then ask the
bank to increase your credit card to $1,000.

Save for your down payment.

Generally, after a bankruptcy lenders will ask for a down payment. It is comforting to a lender
to know that the borrower has some money on the table. You can expect a lender to require a
minimum of 10% as a down payment. You should start saving as soon as possible. Set up a
separate bank account and deposit a minimum amount from your pay check each pay period.
Meanwhile, control and cut back on your expenses. Dining out at restaurants might have to be
eliminated. Preparing your lunch and taking it to work could save you about $200 a month.

How to shop for a mortgage after bankruptcy.

Buying your house after a bankruptcy will require commitment, consistency and hard work.
The experience will help you to become a qualified and informed homeowner.  Keep things in
perspective. The low rates you see advertised do not apply to you. They are for the best
customers, borrowers with good credit. Pay the higher interest rate, but make sure that the
mortgage does not have a prepayment penalty. Pay your mortgage on time and refinance in
two or three years at a lower mortgage rate.