As you may think, having a bankruptcy record can totally destroy your credit score. But do note that getting a 2nd mortgage loan with a bankruptcy credit history is not impossible. Just that the terms of the mortgage loan can be more restrictive and also more costly interest rates to you.
In theory, no mortgage loan lender in the right frame of mind will want to loan a mortgage to someone who had a bad credit record as like as a bankruptcy. But that is not true in reality. Different loan lender have different credit policies to evaluate if a mortgage borrower will be a good mortgage customer. But you will never know their internal credit policies for assessing bad credit mortgages. So if you had a bankruptcy history, you just have go out there and try out different mortgage lenders and see which one will find you favourable.
You can also try going to mortgage brokers who have a good understanding of the credit policies of different banks. After gathering some information about your credit history, they may be able to tell you immediately which mortgage loan lenders are most likely to give you a bad credit mortgage loan.
You can expect to be subjected to higher mortgage rates, finances fees, processing charges, etc. The lenders way It’s the mortgage lender’s way of getting something in return for taking a bet on a customer who had a financial history as adverse as a bankruptcy filing. Before trying for that 2nd mortgage, do your homework and understand the basis of getting good interest rates.
After bankruptcy, most people do not even want to go back into debt due to the bad experience. They can also expect higher interest rates and charges. So taking up instalment loans like a mortgage or personal will mean higher monthly payments. However, getting and using new credit cards is an easy way to re-establish and build up a good credit record. You can get a credit card or 2, use them every month for small amounts, and make full payments when the amounts outstanding are due. You can slowly regain a good credit reputation this way.
Again it may be difficult to get obtain a credit card with a bankruptcy record. Remember that different lenders have different credit policies. So go out there and enquire to see which lenders find your criteria as satisfactory.
However, getting a 2nd mortgage can be easier since there is a property secured to your mortgage loan. This give the mortgage loan lender more assurance that even if something goes wrong again in your personal financial situation, they can recoup their money from your property. Don’s misunderstand this as the lenders acting like a hungry shark. The last thing a lender wants is to have to bring you to court. It is just too much hassle involved.
Although a2nd mortgage can give you a good chance to improve your credit score, you really cannot expect the best interest rates. So to prevent yourself from blowing a fortune on your mortgage loan, consider only applying for a small mortgage loan.
Sub Prime Loan Lenders And The Best Rates
Applying for a 2nd mortgage with your current mortgage loan lender may not be a good option. Because when you first acquired that mortgage, you got it with good credit. Now, because of your bankruptcy record, your credit will be considered as being greatly deteriorated. You can contact sub prime loan lenders. People with any credit record can get loans from sub prime lenders. Therefore, bankruptcy, foreclosure, repossession borrowers can still get a mortgage loan.
Furthermore, these lenders can offer lower interest rates than the big mortgage lenders or banks that seem to have been around forever. Mortgage brokers can help you find lenders who can make you an offer. So if you find it a real hassle going to all loan lenders to enquire yourself, go to a mortgage broker who can do the job for you. There are many mortgage brokers available online if you conduct a search.