Bankruptcy - A Mortgage Loan

Is there life after the financial black hole of bankruptcy? Many people believe that if they file for bankruptcy that that is the end of the road for at least seven years – that they can kiss credit cards, auto loans, and mortgages good-bye. As it turns out, that is not the case, and oddly enough, you can get a mortgage easier that you can get any other kind of loan post bankruptcy. Mortgage loans with a Chapter 13 bankruptcy filing or a Chapter 7 bankruptcy filing is remarkably easy. In fact, many people find that are eligible for mortgage loans the day after their bankruptcy case is discharged. Does that mean you should get a one of these post bankruptcy mortgage home loans? Not necessarily. Everything comes at a cost, and these bankruptcy friendly loans could be your first step back towards the bankruptcy courthouse.

Most of the lenders who are willing to accept bankrupt clients for mortgage loans are called B-C-D lenders. They will lend you money – but for a hefty fee. You can expect to pay interest rates of up to 15% on one of these bad credit mortgage loans, which means you monthly payments will be through the roof. Default on one of these loans, and it means big trouble for you. These companies aren’t interested in working with you through the hard times. They want your money, and if you don’t have it, get ready for foreclosure and another financial black mark on your credit report.

An exception to the rule is an FHA post bankruptcy mortgage loan. An FHA loan is subsidized by the government to allow people with spotty financial histories to become homeowners but at rates that won’t just get them into more financial trouble in the future. FHA loans generally cost you only ½ a percentage more than the going rate for a standard mortgage. You normally will have to wait a year or two after declaring bankruptcy to qualify for one of these loans, but many experts consider them to be a step in the right direction for people trying to recover from a bankruptcy.

If you want to find a bankruptcy friendly home loan lender in your area, the internet is a great place to search. You can look for lenders in your area, such as Illinois bankruptcy mortgage loan lenders, to see who in your town is amenable to helping people with mortgage loans after bankruptcy discharge. The internet is also a great place to reviews of loan companies so you can stay away from predatory lenders.