Getting a mortgage following bankruptcy is possible, bad credit mortgages are available for people who find themselves coming out of the other side of bankruptcy and wanting to finance a home purchase. Most lenders will want you to wait for at least 2 years after the date of the bankruptcy discharge before applying for a mortgage.
During these two years it is up to you to make sure your credit rating goes up and your payment history is perfect, as these will go greatly in your favour when the time to apply comes. Generally after two years you will be able to get a mortgage loan without much trouble, and you may even be able to get 100% finance. Lenders decisions will be based on slightly different criteria than they would for a regular mortgage though, they will not only look at your credit report and rating, they will also want to see income verification and that you have access to liquid assets. Most mortgages that are given following bankruptcy will need a down payment, as this gives the lender commitment on your part, if you are willing to invest in your property you are less likely to default on your payments.
It is important to remember that the terms of mortgages after bankruptcy are likely to be less favourable than those of a regular mortgage as it is seen as high-risk lending. This may mean a larger down payment is required, or the interest rates may be higher in order to limit the lenders exposure. This is why most bad credit mortgage providers like to see you are in a position to make a large down payment. If you don’t have enough for the down payment required, there are a couple of options open to you, the first is to wait and save up more money, which has the added benefit of taking you even further away from the date of your bankruptcy discharge, making you a more attractive debtor. The second is to take out a loan to make up the balance of the down payment, now this is a potentially dangerous move as you will have to be able to keep up with both the payments on the loan and your mortgage, however it may be easier to borrow a smaller sum even with poor credit.
There are many lenders out there that can offer financial assistance to people with bad credit and those looking to obtain a mortgage after bankruptcy.