Many people have the belief that they cannot get approved for a mortgage after they file for bankruptcy and to some degree they are right. However, the days when filing for bankruptcy meant that you were virtual leaper to creditors are over. Mortgage finance companies are starting to realize that the average American has bad credit or credit problems and many more are being forced to file for bankruptcy every year in order to recover from their debts. Because finance companies are realizing that this is the norm, they are beginning to make allowances for those that wish to finance a mortgage after bankruptcy.For many people this is a dream come true, but they don't realize is that most of these bad credit/bankruptcy lenders do penalize you to some extent when they approve you for your mortgage loan. You interest rates are far worse than those that have good or perfect credit and by the time that many of these loans are fully paid off, you realize that you have paid nearly double the amount of the mortgage loan. This is how mortgage companies make up for the money they are lending you.
Mortgage after bankruptcy is not the best of choices because aside from the expanded loan fees and costs you have to pay, these companies are also very quick to foreclose on your property in the event of a missed payment. You can refinance with an FHA mortgage one year after filing a Ch. 13 and showing proof that you were paying your Trustee Payments AND Mortgage Payments each month. The late fees are also a great deal higher for you as well. Before you consider applying for a mortgage after bankruptcy, make sure that you are with a reputable company that is not trying to leave you holding the bag in the end….or living in one. Your best bet is to consolidate your debts if you can, but if you are already in bankruptcy, don't worry; you can get a mortgage too.
