Buying A Home After Bankruptcy – Low Credit Score Mortgage Loans

Excellent credit is not required to buy a home. Of course, a higher rating will qualify home buyers for a low rate and better loan programs. Still, buying a home after bankruptcy is easy. Although home loans following a bankruptcy discharge come with high rates, a home purchase is a great way to quickly boost a low credit rating.

Here are a few tips on getting a low credit score mortgage loan.

Sub Prime Mortgage Loan Programs

There are many options available to home buyers with a low credit rating. Credit scores below 680 do not qualify for prime home loans. Hence, these persons will need to speak with a sub prime mortgage broker or lender. Sub prime loans are intended to assist those who cannot obtain traditional mortgage financing. These lenders work with all types of people and credit situations. Furthermore, sub prime lenders have a multitude of different loan options.

Who Qualifies for a Sub Prim Mortgage Loan?

Anyone with a low credit score can get approved for a sub prime mortgage loan. However, there are certain limitations. Many lenders will not approve a mortgage loan if the borrower's credit score is below 500. In this instance, the risks are too high. Home buyers who fall into this group may consider improving their credit before applying for a home loan.

Having a chapter 7 bankruptcy, collection accounts, and judgments will not disqualify a buyer from obtaining a sub prime mortgage loan. Naturally, loans of this sort have higher interest rates. However, if the home buyer maintains a good payment history, they will have the option of refinancing for a better rate in the future.

Other Loan Options Available after Bankruptcy

 As mentioned, sub prime mortgage lenders offer a range of home loans for every need.

Following a bankruptcy discharge, home buyers have the option of obtaining a “no credit score home loan.” Because lenders do not offer 100% financing on these loans, buyers must be prepared to pay a 20% down payment.

Another loan option available is the zero down home loan. This loan is offered to buyers with good and bad credit. Zero down home loans include 100% financing, which is perfect for first time home buyers and buyers with little cash savings. To qualify for a no money down home loan with bad credit, your credit score cannot fall below 580.

Summary

Excellent credit is not required to buy a home. Of course, a higher rating will qualify home buyers for a low rate and better loan programs. Still, buying a home after bankruptcy is easy.

Although home loans following a bankruptcy discharge come with high rates, a home purchase is a great way to quickly boost a low credit rating. Here are a few tips on getting a low credit score mortgage loan.

Call Today for a Free No Hassle Consultation ask for Charles 313-343-9930

Thanksgiving Special on Chapter 7 Bankruptcy

From now, until Turkey Day, you can get a complete chapter 7* case filed for $700.00, which includes the court costs!

A chapter 7 will eliminate all your debt, and allow you to keep all your assets, what a deal!!!!

With the average household running about 20k in debt, a chapter 7 is a perfect way to eliminate it and get that fresh start you deserve.


*this applies to a "basic" case, price is subject to change if issues presented are more complex

FREE CONFIDENTIAL CONSULTATIONS ARE ALWAYS OFFERED, CALL OR EMAIL ME TODAY FOR AN APPOINTMENT. 

Obtaining a Mortgage Post Bankruptcy

Getting a Mortgage After Bankruptcy

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. As a general rule, the longer you wait after your bankruptcy is over, the better chance you will increase your score, and have better success. A benchmark is about two years after discharge.

Finding The Right Mortgage

With a credit score less than 650, you will need to apply for sub-prime financing with rates slightly higher than conventional home loans. Sub-prime 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 sub-prime lending, you don’t pay for private mortgage insurance, even with less than 20% equity.

Before You Start Your Search

Before you start your sub-prime mortgage search, get a copy of your credit report. Check it for accuracy after 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. Each time a credit report is ordered it will impact your score, unless they do a “soft pull.”

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 refinance. 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.

Student Loans and Bankruptcy

Student Loans, Bankruptcy, and Alternatives

There are a wide variety of reasons why you could be considering filing bankruptcy to eliminate student loans as a solution to your student loan debts. Even though this should be your last resort to paying off your student loans, you might find yourself in a situation that could require you to file for bankruptcy to try and eliminate your student loans.

Can You Declare Bankruptcy For Student Loans?

You can, but there are certain laws, rules and policies that you must follow. There are also certain qualifications that you must be able to prove in order to even qualify for a student loan bankruptcy. As far as qualifying to declare bankruptcy, this could be different for almost everyone and very difficult to prove.

Undue Hardship Under Chapter 7: You must be able to show that you have an undue hardship in order to qualify for this type of bankruptcy. The only way you can prove an undue hardship to declare bankruptcy for your student loans is if you are physically unable to work and you will not be able to work for the rest of your life. This is a rare occurrence, and difficult to prove to a court. You should choose this method of applying for bankruptcy if you meet the qualifications for it.

Chapter 13 Bankruptcy: You shouldn't expect to be able to get rid of all of your student loan debts by filing under a chapter 13 bankruptcy, but you could get rid of some or most of it. The best way to apply for this one will be to expect to have your student loan debt consolidated, because that is likely what the court will do (as well as eliminate some of it). To qualify for chapter 13 you will need to prove that you have the disposable income available to pay back at least most of your student loan debt.

Are There Any Alternatives To Bankruptcy?

There are many alternatives available to you instead of filing for bankruptcy. Here is an outline of those alternatives:

Repayment Plan: Work out a payment plan with your current lender that will help lower your monthly payments now and increase as your income does. Your lender wants to work with you and would be happy to help you find a repayment plan that will work for both of you.

Payment Deferment: Contact your lender to ask for an application to apply for payment deferment. If you qualify this will put off any payments you would otherwise have to make and keep you out of collections until you are able to make the monthly payments.

Student Loan Consolidation: Work with another lender to get all of your student loans put into one loan with one monthly payment to make. This will decrease your monthly payments and your interest rate, saving you money now and later.

As mentioned before, filing bankruptcy to eliminate your student loans should be considered as a last resort if you can't simply find anything else that will work for you and your financial situation. There are many alternatives to filing for bankruptcy and your lenders can help you with this as they do want you to pay back the loan even if they have to make some adjustments.

Call Charles L Basch II at 313-343-9930 today.

Advantages of Bankruptcy

Advantages of Bankruptcy

Folks who are considering filing bankruptcy are faced with a lot of questions and are often not sure what the advantages could be, if any. Besides the obvious advantage of not having that lingering debt that hangs over their heads everyday, are there any other advantages?

There are many different aspects to consider before making a final decision. There are always options, but choosing the right option is not always easy. Below are some of the advantages that can help folks make those decisions that are right for them. The advantages are not always the deciding factor but they can sure help you make a wise decision.

Section 362-The Automatic Stay

One advantage of filing for Chapter 7 or Chapter 13 bankruptcy, is that when the petition is filed it invokes the automatic stay, which requires the creditors by law to cease all activities of collecting the debt. This means that they have to stop calling, leaving messages, or mailing you notices when they are notified of your intentions. They have to stop all garnishments, and in some instances return money that they already seized. Creditors can be penalized by the court system if their efforts continue.

Chapter 7 A "Fresh Start"

Chapter 7 bankruptcy is the better option for debtors who have little or no property, lower income and mostly unsecured debts. But chapter 7 can include both secured and unsecured debts. Unsecured debts are those like medical bills and credit cards. A secured debt is when you have decided to use collateral that can include your home, car, or other major assets you have ownership of. Chapter 7 bankruptcy is also referred to as liquidation.

Possible Disadvantages

Chapter 7 is not a perfect solution because there are some unsecured debts that do not qualify for discharge under Chapter 7 the biggest of which is most school loans. Folks who are eligible for Chapter 7 bankruptcy may be discharged or forgiven from most unsecured debts. With a secured debt the creditor is entitled to collect the debt by seizing and selling certain assets of the debtor if payments are missed. Or you may have the option, if not to financially burdensome, to reaffirm the secured debt and keep that asset.

Chapter 13

Chapter 13 bankruptcy provides a better solution for those folks who have a regular income, secured debts and do not which to loose their property. Chapter 13 bankruptcy allows the debtor to submit a plan, to the bankruptcy court to repay the debts over a three to five year period of time. This means the person does not have to lose ownership of the items used to secure the debt. Each individual’s situation is different though, and must be evaluated before deciding which type of bankruptcy is right for their particular situation.

Pre Filing Credit Counseling and Debtor Education Courses

When someone decides to file for bankruptcy, whether it is Chapter 7 or Chapter 13, they are required to take two courses a pre and post filing course. The consumer is required to take a course pertaining to credit counseling prior to filing the case and debtor education course after filing and before discharge. This is an advantage that not only helps you figure what had went wrong, but it will also help you find new ways of budgeting, paying bills, and spending your funds so that you do not run into the same financial difficulty in the future. The courses also teach you how to protect yourself against identity theft and also how to read and monitor your credit report. Today, most, if not all companies that offer these courses offer them online for quickness and convenience.

Employment After Bankruptcy

Folks that are concerned about being dismissed from a job due to the fact that they are filing bankruptcy should not be worried. Another advantage is that employers are not allowed to dismiss an employee based upon the fact that they, the employee, are filing bankruptcy. Keep in mind, however, that it may affect your ability to obtain new employment for a few years after filing bankruptcy.

CALL ME TODAY AT 313-343-9930

5 Easy Steps to Rebuild Your Credit after Bankruptcy

Bankruptcy often is the last solution for many folks who have unbearable debts. With the filing of bankruptcy, you will get rid of your debt and stop the harassing call of your creditors.

Although avoiding bankruptcy has many undesirable consequences such as your bad credit and payment history will dog you for years to come, but with a little work, and the strategic filing of a bankruptcy case you can improve your credit even before these negative records ruin your credit score. Here are five easy steps you can take to rebuild your credit after you file.

Step 1: Get to Know Your Current Credit Status

The first step to rebuilding your credit is to look at exactly where you stand. Order your three credit reports from the three national credit bureaus: TransUnion, Equifax, and Experian. You can order these reports online, it easy and secure.

Print each report and review it closely. Try to understand the information listed in your credit reports and highlight any negative records or inaccuracies that are damaging your credit score.

Step 2: Check the Expiration Dates

By law, your bankruptcy will remain in your credit report for 7 to 10 years, but the exact expiry date might be different among these 3 reports. Look up the exact date of each of bad records including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records. You will likely see a major improvement in your credit score when these records expire.

Step 3: Request Corrections On Any Inaccurate Records  

If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. The bureaus will initial a 30 days investigation to see whether your requests are valid and if so, they will correct the inaccuracy in your credit report.

Just one note, don't try to dispute any of the positive information listed in your credit reports and it is a waste of time to attempt to dispute these records. Disputing positive information may actually harm your credit scores.

Step 4: Start to Create Good Credit

Since there is no way to remove your bad record from your credit report, the best way to improve your credit score is to add good credits and building up your credit from there. You can easy do this by open up a new credit card from banks like Orchard Bank (Orchard bank has credit card plan designed specially to help people rebuild their credit after bankruptcy).

Use this new credit card responsibly and make the monthly payment timely; with this you are building new history of good credit behavior on your credit report. Over time, you may want to open additional credit card accounts or obtain a loan to boost your credit score even higher.

Step 5: Monitor Your Progress

Subscribe to a credit card monitoring service or get a credit card monitoring software and use it to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports.

Summary

Bankruptcy does not need to chain you to bad credit for the next seven to ten years, but you have to be proactive in order to recover and rebuild your credit.

Call Charles L Basch II @ 313-343-9930 TODAY!!

The Automatic Stay, Section 362 of the Bankruptcy Code

Bankruptcy in General for Both Chapter 7 and 13

A federal legal proceeding in which all creditor collection activities must come to a complete stop.  Probably the most important aspect of either chapter is the Automatic Stay of all proceedings against the Debtor under 11 U.S.C. § 362 of the Bankruptcy Code.  Think of the automatic stay as a giant shield that protects you from all of your creditors and stops all collection activities such as foreclosure, garnishment, repossession, tax levy, utility shutoff’s, and lawsuits that are pending, or complete.  It stops the creditors from calling your home or business or your friends and family.  It goes so far as to stop them from sending you those monthly bills in the mail!