Bankruptcy Home Loans

The dream of home ownership isn't out of reach if you've filed for bankruptcy in the past. Just because you needed a little help getting your finances back on track, doesn't mean lenders wont work with you. Some lenders even specialize in providing loans for people with damaged credit or prior bankruptcies.

When you apply for a home loan, your credit is ranked on a scale from A to D. You lose points for things like late payments, over-the-limit fees, and bankruptcies. One way to improve your score, or to receive better loan terms, is to have a decent job. The longer you've worked for the same company, the better. Creditors consider long-term employment to be a sign of stability.

If you've had a bankruptcy in the past, you're less likely to qualify for a grade "A" loan. As a rule, most people who have filed for bankruptcy in the past are required to make larger down payments on their homes. Some lenders give customers "B" grade loans just 18 months after filing for bankruptcy. In order to qualify for a "B" grade loan, you need to have been at your job for several years, have at least one line of credit, and make a down payment of at least 15 percent of the value of the home.

Even if you only qualify for a "D" grade home loan, you can still buy a house. With this credit rating, you will likely need to make a down payment of at least 30 percent. In addition, your interest rates will be higher, starting at around ten percent or more. If you get approved for a bankruptcy home loan, it's important to make sure you can afford the monthly payments and other fees.