Sometimes bad things happen to good people. Even the most financially responsible people can go through tough times, leading them to bankruptcy, a foreclosure or having to go through a short sale of their home.

More than 900,000 personal bankruptcies were filed last year and in 2013, that number was more than a million. As the economy rebounds and people’s lives get back to order, many are beginning to wonder if their dreams of home ownership are over.

The good news is that it will be possible for many of these people to purchase a home, it just takes some time and careful planning. And the sooner you start planning, the easier the process will be!

In nearly all circumstances, if someone is looking to secure a new mortgage after going through a bankruptcy, foreclosure or short sale there will be a mandatory waiting period. Depending on your situation that waiting period could be less than a year or much longer. In the case of a bankruptcy, that waiting period doesn’t start until your bankruptcy has been discharged. The rules concerning the waiting period vary by the type of mortgage you will be applying for and can be very complicated, so it’s best to set up a free consultation with a mortgage loan originator as soon as possible.

While you go through the waiting period, there are still some things you can and should do to become more desirable to a mortgage lender.

An easy way to start is by rebuilding your credit score. This will not be an overnight process, so start as soon as possible. Use your credit cards responsibly by building up a balance that you can also easily afford to pay off on time, or even early, each month. This will show mortgage lenders that you’re a responsible borrower who can be trusted over the long term. If your credit cards were cancelled, you may need to look into a secured credit card, which requires the borrower to have a cash deposit on hand.

While we’re on the topic of credit, it will be important to make sure you review your credit report regularly for accuracy. While a financial hardship may leave a mark on your credit score, you’ll still want to review your credit report regularly to ensure everything is accurate and work to remove any errors as soon as possible.

A large down payment can also go a long way in helping to make you more appealing to a mortgage lender. It not only shows you are willing and able to save, but it may also help you secure a lower interest rate. As soon as you can, start saving money so when the time is right, you have a down payment ready and you’re not scrambling to save as you start looking for your next home.

Mortgages are customized based on each borrowers personal situation and definitely not “one size fits all” products. If you’re interested in starting down the path to home ownership, click here to find the HomeBridge office closest to you. HomeBridge is a national lender, so even if the school your child attends is out of state, our associates can still help you with your mortgage needs.

A consultation is always free and there is never any obligation to work with HomeBridge later on, even if you do decide to purchase a home.


Related Articles

Current mortgage interest rates are always a hot topic for homebuyers or those who are curious about the affordability of homeownership. Knowing the general market rate can be helpful when budgeting for an eventual purchase. But when you eventually sit down with your lender, the quoted rate might be very…
Read More of the post What Determines Your Mortgage Interest Rate?

  Whether you are a Real Estate Agent or a borrower, not having the right mortgage lender could put the kibosh on your deal. If you want the right product mix, lowest rate and quick funding, you also want a lender with a proven track record who will be responsive…
Read More of the post Why Work With A Mortgage Team?

You may have found your dream home, but it might remain a dream without approved financing. Bank statement loans, as the name implies, use bank statements to determine your income. They are a non-qualified mortgage product that offers financing to homebuyers who may not be eligible for a traditional mortgage…
Read More of the post Non-Qualified Mortgage: Bank Statements

The supply of houses on the market has fallen from an average of 1.6 million units monthly in 2018 and 2019 to just over 1 million in 2021 – and the monthly figures for this year are lower still. Fewer homes available and high demand means home buyers must leverage…
Read More of the post Benefits of Pre-Approval: Get the Upper Hand