Bankruptcy can be very trying for anyone. If you have experienced this, you would definitely need some time to come to terms with it on your own. What if, after bankruptcy, you feel an acute need to buy a house? Impossible, you would say. However, it is not so. You will be glad to know that even after bankruptcy you will be able to get a house loan.
What does it involve?
When you go for a housing loan, you would need to work out on two major details, (i) deposit and (ii) income verification.
Normally, you would be considered for a loan - on whatever terms - only after two years after you declare bankruptcy. Once this waiting period has passed, and you have survived it well, you would be able to avail of whatever loan you want, including a mortgage, up to 100%. You will need however to have your name cleared of any debts, since the bankruptcy, if any.
In case you feel you cannot wait for the two years exile period, then you could still apply for a mortgage - however, in this case, you would need to put a deposit of up to 5% and you would need to have an impeccable history of repayment post bankruptcy.
The history of repayment cannot be influenced much, so I guess you would need to be really punctual at repayment to regain a good credit score. As to the deposit it would be easy for you to raise the money required considering the following few ideas:
Hand loans - you could go around your own friends and relatives and try to raise the money in this way. This could be a short terms loan, since once you get the mortgage for the house, you can get a second and even third mortgage with which you could easily repay the amount borrowed. Remember, you should keep track of the money borrowed, preferably through a written contract, since you will need to show proof of the source of the money for deposit to the bank/lending organization.
You could try to cash on your retirement plan - this money would come in good stead at times like this; you could cash on an investment plan and get the required deposit out of it, while you could always repay yourself by taking out a second or even a third mortgage on the house.
Down payment assistance programs - sometimes, the seller himself/herself would like to help you make the down payment. However, since this is illegal there are other ways to do this, with the knowledge of the seller, i.e. use the deposit assistance programs, such as Nehemiah or neighbourhood Gold programs and many others such as these. The Internet would be a good place to check out on this option and the requirements you need to fulfill to avail it.
As you can see, where there is a will there is a way. However, it is good if you understand that you are not really free to make the same mistakes again. Hence, financial discipline should be strictly maintained, so with time your credit score will repair itself.
