If you've gone through bankruptcy, you may wonder if it's possible to get a mortgage again. The good news is that it is possible to get a mortgage after bankruptcy, but there are a few things you need to know before you start the process.
Understand the different types of bankruptcy
There are two main types of bankruptcy: Bankruptcy involves selling off your assets to pay off your debts. This type of bankruptcy is usually reserved for people with little to no income who cannot pay off their debts. On the other hand, bankruptcy involves creating a repayment plan to pay off your debts over three to five years.
Know how long you'll have to wait
The amount of time you'll have to wait to get a mortgage specialist after bankruptcy depends on the type of bankruptcy you filed. If you filed for the first type of bankruptcy, you'd typically have to wait at least two years before you can get a mortgage. If you file for the second type of bankruptcy, you'll typically have to wait at least one year before you can get a mortgage.
Improve your credit score
One of the most important factors lenders consider when deciding whether to approve a mortgage is your credit score. If you have a low credit score due to bankruptcy, you'll need to improve it before applying for a mortgage. You can improve your credit score by paying your bills on time, reducing your debt, and using your credit responsibly.
Be prepared to put down a larger down payment.
If you manage to get a mortgage after bankruptcy, you may be required to make a larger down payment. This is because lenders see you as a higher risk due to your default and want to mitigate that risk by requiring you to put more money down.
Shop around for the best mortgage rates
It's important to shop around and compare mortgage rates from different lenders. Don't be afraid to negotiate with lenders to get the best rate possible. Remember that getting a mortgage after bankruptcy may be more difficult, so you may have to pay a higher interest rate than someone with a perfect credit history.
Consider working with a mortgage broker.
Consider working with a mortgage broker Burnaby if you're having trouble getting a mortgage after bankruptcy. A mortgage broker can help you find lenders willing to work with people who have gone through bankruptcy. They can also help you understand the mortgage process and what you need to do to get approved.
Keep an eye on your finances.
After you get a mortgage, it's important to continue to manage your finances responsibly. This means paying your bills on time, reducing debt, and using credit responsibly. By doing this, you can improve your credit score and make it easier to get approved for loans in the future.
Conclusion
Getting a mortgage after bankruptcy is possible, but it may be more challenging than it would be for someone with a clean credit history. However, you can increase your chances of getting approved for a mortgage by understanding the bankruptcy process, improving your credit score, and shopping around for the best mortgage rates. Remember to work with a mortgage broker if you need help getting approved. Continue to manage your finances responsibly to improve your chances of getting approved for loans in the future.
