How to Get a Bankruptcy Mortgage

A bankruptcy mortgage is entirely possible if you follow the right path after financial trouble. Not everyone realizes home ownership is an option the few years after a bankruptcy. This article will show you how to increase your chances of obtaining a bankruptcy mortgage to purchase a home.

Things You'll Need

• Bankruptcy discharge papers
• Secured credit card
• Phone

Instructions

1. Send a copy of your bankruptcy discharge papers to the 3 credit bureaus. State that you need all the negative accounts charged off from your bankruptcy to be removed immediately. Unfortunately, without this step, these accounts can sit on your credit report for years. This looks horrible to bankruptcy mortgage lenders.

2. Get a secured credit card. Some banks and credit card companies offer secured credit cards to individuals with bad credit. You deposit money into an account and use it as collateral on your credit card if you neglect to make payments. This way, you can gain positive credit once again for a bankruptcy mortgage, and the credit card company doesn't have to assume any risk.

3. Wait 2 years after your bankruptcy case is settled to apply for a bankruptcy mortgage. You don't have much of a chance getting approved for a loan before 2 years.

4. Save for a sizable bankruptcy mortgage down payment. The more money you have to put down on a home, the better chance you have for getting approved for a loan. The best case scenario is 20%, but 5% will work in many cases.

5. Call your utility company and secured credit card company and have them prepare a letter of credit recommendation for your bankruptcy mortgage. Of course, you should be paying your bills on time or early each month, so your creditors can give you a good recommendation.

Tips & Warnings

• Make sure you pay your rent on time each month. Any bankruptcy mortgage lender will look closely at your rent payment records because this indicates your willingness and ability to pay your mortgage on time.