Due to unforeseen financial conditions, you may have been forced to file for bankruptcy and now you need to get a mortgage for your dream home, it’s obvious that you will have fewer options than before. However, you need not to get disappointed as there are still various sources of credit available if you know where to look for it.
Sub prime loans: If you have recently filed for bankruptcy, you may apply for sub prime loans. You
may get approved by a loan provider because they will not look into your past credit history and you will get the chance to own a home. The rates of interests on these kinds of loans will be quite higher but when you have limited options, this may be the way to go and get into the real estate market. You may be ready to pay higher interest rates for some time until your credit scores have recovered and then you can refinance on to a regular home loan with improved credit.
FHA mortgage loans: The FHA has recently become stricter after the crunch in the credit market and there are lots of criteria before the loans are approved. To get your finance from the FHA, you need to have a credit score of at least 600, but some lenders can be quite lenient regarding your credit ratings. The major advantage of getting a FHA loan is that they are much cheaper than a sub prime home loan. You can save a lot of money just in interests if you look at overall time period of the home loan.
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