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Mortgage After Bankruptcy - Credit Tips On How to Get A Mortgage To Buy Your
By Dean Shainin
These days, many lenders understand that irresponsibility is not the only reason why people become
bankrupt. High cost of living, education, healthcare, and homeownership; as well as some other
uncontrollable things which happen in life such as job loss, divorce or sickness means that bankruptcy
can happen to anyone, even to those who are financially prudent. As a result, many lenders are willing to
take a chance with high-risk borrowers by offering credit, loans and mortgages to people who have
experienced a bankruptcy.
Life after bankruptcy is about starting over and working hard to create a better credit record. When
someone who was once declared bankrupt is applying for a mortgage, the lenders scrutinize how they
have handled their finances in the past one to two years.
So, what are the key tips for getting your life and financial situation back on track after bankruptcy?
1. Spend your money wisely; make an effort to have a budget so that you know your incoming and
outgoing money to cover your bills, loans and expenses.
2. Try to save some money in your savings account on a regular basis.
3. Get a copy of your credit report and ensure that it is accurate. If you have recently paid off all of
your creditors, your credit report states this.
The main actions which will show the potential lenders that you are working towards your financial
recovery are establishing a solid record with new accounts, re-establishing old accounts, regular
contributions to a savings plan, and payroll deductions that go into your children’s college fund, among
others. If your recent financial activities are good, this tends to offset the old payments and collections you
had in the past, which works in your favor because it shows your progress towards financial recovery.
It is recommended that you apply for a credit card that is easy to get. Usually department stores and gas
stations are a good place to start. You don’t necessarily have to use them, but having them and making
the necessary payments will offer you a degree of financial credibility. You can get a secured credit card
or debt card from a bank, which operates like an automated teller machine or ATM card. Although the limit
is tied to the amount of money available, the record of payment on the account is reported like that of any
credit card, and this is important for proving your financial recovery.
What Elements of Credit Scoring to Consider with a Mortgage after Bankruptcy?
The formula for credit scoring allocates the greatest weight to the absence of problems, and then brings
your score down according to what problem or condition is noted and how old it is. According to the
Beacon system, the main problems and aspects that reduce your score when your mortgage application
after bankruptcy is considered are outlined below.
* Current outstanding accounts, number of accounts with outstanding balances, number of finance
company accounts, number of accounts currently or in the past not paid as agreed
* Too few bank or national revolving/open accounts.
* Recent payment history is too new to rate
* The length of time accounts have been established
* No non-mortgage account balances, or non-mortgage balances not recently reported
* Amount past due on accounts; account not paid as agreed, public record, or collection agency filing
For you to be able to start applying for a mortgage, your bankruptcy should be at least two years since it
was discharged. It is important that within these two years you make every effort to improve your financial
history by spending wisely and saving some money, all of which will prove that you have recovered from
the bankruptcy.
Dean Shainin is a consultant specializing in home loans, strategies for loan financing, home equity loans,
and consolidation loan information. To see a list of recommended loan companies, tools, resources, free
quotes and articles, visit this site:
http://www.homemortgageloantips.com
Get free valuable online tips for saving money from his: Refinancing With Bad Credit website.
By Dean Shainin
These days, many lenders understand that irresponsibility is not the only reason why people become
bankrupt. High cost of living, education, healthcare, and homeownership; as well as some other
uncontrollable things which happen in life such as job loss, divorce or sickness means that bankruptcy
can happen to anyone, even to those who are financially prudent. As a result, many lenders are willing to
take a chance with high-risk borrowers by offering credit, loans and mortgages to people who have
experienced a bankruptcy.
Life after bankruptcy is about starting over and working hard to create a better credit record. When
someone who was once declared bankrupt is applying for a mortgage, the lenders scrutinize how they
have handled their finances in the past one to two years.
So, what are the key tips for getting your life and financial situation back on track after bankruptcy?
1. Spend your money wisely; make an effort to have a budget so that you know your incoming and
outgoing money to cover your bills, loans and expenses.
2. Try to save some money in your savings account on a regular basis.
3. Get a copy of your credit report and ensure that it is accurate. If you have recently paid off all of
your creditors, your credit report states this.
The main actions which will show the potential lenders that you are working towards your financial
recovery are establishing a solid record with new accounts, re-establishing old accounts, regular
contributions to a savings plan, and payroll deductions that go into your children’s college fund, among
others. If your recent financial activities are good, this tends to offset the old payments and collections you
had in the past, which works in your favor because it shows your progress towards financial recovery.
It is recommended that you apply for a credit card that is easy to get. Usually department stores and gas
stations are a good place to start. You don’t necessarily have to use them, but having them and making
the necessary payments will offer you a degree of financial credibility. You can get a secured credit card
or debt card from a bank, which operates like an automated teller machine or ATM card. Although the limit
is tied to the amount of money available, the record of payment on the account is reported like that of any
credit card, and this is important for proving your financial recovery.
What Elements of Credit Scoring to Consider with a Mortgage after Bankruptcy?
The formula for credit scoring allocates the greatest weight to the absence of problems, and then brings
your score down according to what problem or condition is noted and how old it is. According to the
Beacon system, the main problems and aspects that reduce your score when your mortgage application
after bankruptcy is considered are outlined below.
* Current outstanding accounts, number of accounts with outstanding balances, number of finance
company accounts, number of accounts currently or in the past not paid as agreed
* Too few bank or national revolving/open accounts.
* Recent payment history is too new to rate
* The length of time accounts have been established
* No non-mortgage account balances, or non-mortgage balances not recently reported
* Amount past due on accounts; account not paid as agreed, public record, or collection agency filing
For you to be able to start applying for a mortgage, your bankruptcy should be at least two years since it
was discharged. It is important that within these two years you make every effort to improve your financial
history by spending wisely and saving some money, all of which will prove that you have recovered from
the bankruptcy.
Dean Shainin is a consultant specializing in home loans, strategies for loan financing, home equity loans,
and consolidation loan information. To see a list of recommended loan companies, tools, resources, free
quotes and articles, visit this site:
http://www.homemortgageloantips.com
Get free valuable online tips for saving money from his: Refinancing With Bad Credit website.
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