Having a patchy history with credit products can make securing a traditional home loan difficult. Because the nature of mortgages works on repayments, if there is evidence of your failure to come through on similar commitments in the past, lenders may be wary of providing you with a home loan at all.
However, a bad credit home loan could be the perfect thing for people in this situation. These loans can be a saving grace for those who have struggled with credit products in the past, allowing them to secure property and begin their lives in their own home. However, one thing that could cause complications is bankruptcy. is it possible to secure a bad credit mortgage after filing for bankruptcy?
What is bankruptcy?
Bankruptcy occurs when a person or business is unable to pay back their debts to creditors. Their assets are assessed and valued in order to pay back a portion of the remaining balance. Following this, the debtor is relieved of the remaining credit – effectively wiping the slate clean and allowing them to start over.
Naturally, these situations are one of the most extreme cases of someone being unable to make repayments in a credit situation, and could be a major red mark for many lenders.
Can you apply for a home loan after bankruptcy?
After being subjected to bankruptcy, it’s safe to assume your credit rating will be in tatters. Therefore, it could be worth taking some downtime to work on your finances and credit rating before approaching a lender. Giving yourself a period – maybe around two years – to reestablish yourself and gain some stability is a smart strategy. After all, bankruptcy isn’t something to be taken lightly.
Following this, it could be worth investigating bad credit home loans. Get in contact with the team at Redrock to discuss the bad credit mortgage options available to you and begin working towards securing your own home.