COVID-19 has impacted the economy in a number of ways. Many have faced job losses and severe business losses due to which bankruptcy is not uncommon. If you are uncertain about your future funds or are wondering what would happen to your mortgage loans once you file for bankruptcy, read on.
What The Future Holds| How to wade past the blot of bankruptcy: Bankruptcy does put a dent on your financial health but you don't have to lose your sleep over the question of qualifying for a mortgage in the future. With smart planning, you can overcome this hurdle. You should be able to convince the lenders that you have your financial situation under control. For this, you need to show any prospective financing institutions that there is no chance that you would go bankrupt again.
How Do You Get Mortgage Financed After Filing For Bankruptcy: After filing for bankruptcy mortgage financing is different from the standard mortgage financing method. Post bankruptcy, mortgage financiers like to know the actual time of your bankruptcy and when you were discharged from it. The discharge date is considered as a fresh start for you by the lenders. Mortgage financing post bankruptcy also depends on your financial health. Lenders would like to assess the manner in which your credit has been re-established.
Qualifications For Mortgage Financing Post Bankruptcy: If you are wondering what are the terms you would need to meet before you have access to mortgage financing, let us take you through a round-up of the qualifications. Any mainstream lenders would check if it has been at least two years since the date of your bankruptcy discharge. You should be able to make a minimum down payment of 5% (if it is more it is better for you) and should be able to show enough income that would support your future mortgage payments. You would also require the establishment of two years of credit. This should be done via two trade lines, each with a minimum credit of $2500. Not only this, you shouldn't have missed or delayed any payments before applying for mortgage financing.
How Can Mortgage Brokers Help: All said, you will still need support from a mortgage broker who can help get the best mortgage deal in place for you. Mortgage brokers have access to lending channels that are not mainstream. To gain access to these alternate lending channels or financiers, an individual needs to pay a higher interest rate than the mainstream lending rate. The borrower also needs to make a larger down payment which is usually a minimum amount of 20-25%. Mortgage brokers assess the needs of individuals according to their financial health and situation. These alternate lenders provide great respite to those with a history of bankruptcy or consumer proposal.
If you are in need of a mortgage financing post bankruptcy and feel you qualify, we would be happy to help you in every way possible. Do not hesitate to reach out to us!