It is virtually impossible to own a home without a mortgage loan. The credit appraisal department of the bank or the mortgage institution shall study your credit score and assess your financial stability in order to determine your ability to service the loan. They would certainly check whether you have filed for either a Chapter-7 or Chapter-13 bankruptcy in the past. Let us just spend a few lines on understanding the difference between a Chapter-7 and a Chapter-13 bankruptcy filing.
A Chapter-13 filing involves a restructuring of one's debt. In a chapter-13 bankruptcy filing, an individual debtor seeks a relief for payment defaults by way of a mutually agreed revised payment plan with the lender. A Chapter-7 bankruptcy involves liquidating the non-exempt assets of the debtor to pay the creditors. It is for this reason that a chapter 7 bankruptcy has a more severe impact on one's credit rating than Chapter-13 bankruptcy filing. There is no doubt that bankruptcy filing does affect your financial rating but the impact can be managed and handled by taking care of a few important points.
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You can be assured that there are several instances of individuals who discharged their bankruptcy and have been sanctioned a mortgage loan. This however needs you to manage your finances well, re-establish your credit score and would require good record keeping to convince the lender that you have overcome the difficult phase of your life.
The most important consideration is the time elapsed between the discharge of your bankruptcy and filling for a home mortgage. It is prudent to have a time gap of at least two years between discharge of personal bankruptcy and filing for a fresh mortgage loan. Make sure you apply for a reasonable amount of loan and backed by a 10-15% down payment which would indicate that you have enough resources currently which have allowed you to accumulate this sum ever since you came out of the difficult period. It is essential to prove to the proposed lender that you have a steady stream of cash flows currently. Make sure you keep building your credit score and keep proofs to show that you have been making timely payments to your credit card issuer.
Your application for a mortgage loan after a bankruptcy should be for a reasonable amount of loan. Start with a smaller property. Establish your credibility by repaying and servicing your loan on time and then think of moving to a bigger property. Make sure you present a true and fair picture of your current state of affairs and the reason as to why you had to file for bankruptcy. Suppressing financial information is of little help and can make the approval process more daunting. Hiring the professional services of a bankruptcy attorney would go a long way in a successful bid for a mortgage loan.
It is surely possible to get yourself a mortgage loan even after bankruptcy. You would just have to be more disciplined, organized and financially stable at the time for applying for a mortgage loan.
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