If you have a bankruptcy on your record, qualifying for a mortgage can be a difficult task. There are a number of simple steps you can take after your bankruptcy to ensure you qualify for a good mortgage in as little as two years. Here is what you need to know to rebuild your credit and qualify for a good mortgage.
Clean Up Your Credit
As soon as your bankruptcy is complete start rebuilding your credit. Apply for a credit card and make all of your monthly payments on time. It is important to carry low balances on all of your credit cards. You will want to maintain a low debt-to-income ratio while making all payments on time.
Open a savings account and start saving money every month. Consider holding a garage sale to put cash in the bank. Any money you are able to put away before applying for a mortgage will help your application.
Time Heals Everything
The longer you wait after a bankruptcy to qualify for a mortgage the better. If you wait two years after your bankruptcy is complete you will qualify for better rates; however, it is possible to qualify for a mortgage six months after your bankruptcy. It is important to rebuild your credit during this period. You cannot afford late payments or high balances on your credit cards. These things will hurt your credit and cost you money when you get a mortgage.
Do Your Homework
In order to qualify for the best mortgage loan you need to do your homework and research mortgage lenders. It is important to do your homework before applying for a mortgage in order to avoid making common mortgage mistakes. These mistakes can cost you thousands of dollars.
Predatory mortgage lenders target homeowners with poor credit with their scams; by researching mortgage lenders you will be able to recognize lenders that take advantage and avoid their scams. To learn more about qualifying for the best mortgage after a bankruptcy, register for our free mortgage guidebook: “Five Things You Need to Know before Refinancing Your Mortgage.” Chicago Mortgage Refinance