If you're planning on buying a home after bankruptcy you'll want
to read this article carefully.
Buying a home is probably the biggest purchase you will ever
make. Having a bankruptcy on your credit report adds an extra
challenge.
If you've read my book After Bankruptcy Credit Solutions, then
know that many people who have had a bankruptcy apply for credit
and loans the wrong way.
Mistakes in this arena can cost you $10,000s in extra interest
and other finance charges. Let's look at an example:
You finally find the home you've been looking and the seller's
asking price is reasonable. So you apply for a $250,000 thirty
year loan to purchase the home.
You fill out a mountain of paperwork... sign here, initial here,
sign here, etc. Then not to long after that the lender call you
with great news - you've been approved!
But don't pop the cork on the champagne bottle just yet. Sure,
you were approved but at what cost?
You were able to get a $250,000 thirty year loan at 8%. That
means that over the life of the loan you'll pay $410,388.12 in
interest.
What if you had been able to take specific steps to increase
your credit score and shop loans - and, as a result, reduced
interest rate by 1%. In that case you would end up paying
$348,772.12 in interest.
The 1% difference comes out to $61,615.87! If you were able to
achieve that by taking some very specific steps that would have
been EXTRA money in your pocket!
What's the point of this example? You simply can't afford to get
it wrong when it comes to buying a home.
Let's look at the RIGHT way:
First, if there was ever a time where it's critical that you've
increased your credit score before shopping for a loan this is
probably going to be it.
So you want to increase your credit score. By the way, if you're
trying to qualify for a loan and time is of the essence there's
a way to increase your score in as little as 72 hours!
Next, you want to have mortgage broker on your team. If you've
had a bankruptcy they can be invaluable. But you don't want just
any mortgage broker.
You need to interview a few and ask them some very specific
questions. It's really important that you have the RIGHT
mortgage broker in your corner.
A good mortgage broker will have access to several lenders and
know which one is appropriate for your situation. They will also
be able to walk you through the entire loan approval process.
Only after you have lined up financing should you begin to look
for a home. Of course, you'll want to interview a number of real
estate agents.
But what if you can't get approved for a conventional loan?
Don't worry! There are a number of strategies you can use to
purchase if you can't qualify for a traditional mortgage.
In fact with one of the strategies it doesn't matter if you have
terrible credit, or even if you are unemployed... you can still
qualify!
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Copyright © 2005 Innovative Solutions Publishing, Inc. All
rights reserved.
DISCLAIMER:
This information is designed to provide only a general overview
of the subject matter herein.
This information is provided with the understanding that neither
the publisher nor author is engaged in rendering legal,
accounting or other professional advice. If legal or other
expert assistance is required, the service of a professional
should be sought.
Neither the publisher nor author shall be liable for any loss or
damages, including but not limited to special, consequential,
incidental or other damages, caused by the information contained
herein.
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