How to Finance a Mortgage After Chapter 13 Bankruptcy
- 1). Pay all bills on time during and after the completion of your Chapter 13 bankruptcy plan. Your credit rating will improve over time if you pay all of your bills as agreed. The payment history that gets reported after finishing a bankruptcy plan is a strong barometer for demonstrating that you present an acceptable credit risk.
- 2). Keep your inquires for new credit to a minimum. Only submit credit applications for emergencies or things that you need. You should not initiate more than three inquiries per year after completing your bankruptcy plan. Excessive inquiries will cause lenders to view your actions as aggressive or risky behavior. Refrain from applying for generic or unsolicited credit offers for at least five years after completing your Chapter 13 bankruptcy plan.
- 3). Save money for a down payment and closing costs. Your contribution towards the purchase price of a house reflects that you have some "skin in the game." Earmark a down payment equal to 10 percent of the purchase price, plus another 5 percent for closing costs. This type of commitment will attract more favorable financing terms and improve your chances of being approved for a mortgage loan.
- 4). Apply for a mortgage loan. Contact a mortgage lender to get pre-qualified for a home loan. You will need to supply copies of your pay stubs, tax returns, bank statements, copy of the discharge letter for your Chapter 13 bankruptcy plan and a letter that details your reason for filing. Apply for a mortgage loan online with companies such as E-loan and Lending Tree.
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