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Bank Home Loan After Bankruptcy

written by: Marce•edited by: Donna Cosmato•updated: 3/18/2011

How do you get a home loan after bankruptcy? Patience, better financial decision making, and showing that you have turned your finances around are good ways to impress lenders.

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    You Declared Bankruptcy - Are You Destined to Never Own a Home?

    You may not have wanted to declare bankruptcy, but it seemed like the only thing you could do at the time. Now, you sit and wonder how you will ever get your credit back in good standing so you can purchase a home. The good news is that you don't have to have perfect credit to be able to qualify for a home loan; in fact, you don't even need good credit. All you need is proof that you have changed your financial ways and possibly some extra cash for a down payment.

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    First Step Is to Wait Two Years

    How do you get a home loan after bankruptcy? The first step is to wait at least a couple of years before you attempt to get a home loan. Two years is enough time for the mortgage company to see that you have been working on your credit and have made your payments on time consistently. Two years also gives your credit score a chance to rise a little so it isn't as bad of a score as when you first declared bankruptcy.

    How do you get a home loan after bankruptcy if you don't want to wait two years? Well, you will need to make sure that you pay every single bill on time and pay more than the minimum, even if it's just $10 over the minimum due. Doing this will show that you are actively trying to decrease debt. The other thing you will need to do is save for a down payment. If you can put down at least 3 percent of the home's price, the mortgage lender may be more willing to give you a loan.

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    Save Enough Money for a Down Payment

    If you're wondering how you will ever be able to get enough money to place a down payment on a home, you're at least headed in the right direction. Brainstorm all the ways you can earn extra money, whether it's getting a second job, or asking for a gift from a relative or a friend. If you accept a gift, keep in mind that you must make this known since the lender will need to know all of your income.

    Down Payment Assistance Program

    You can also use a down payment assistance program. There are many down payment assistance programs available online and through your local government. Each program has its own set of eligibility requirements so check with the organization before you fill out the application so that you don't waste your time.

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    With Genuine Determination You Can Own a Home

    Now that you understand how do you get a home loan after bankruptcy, you can work towards home ownership. You can't change the past, but you can shape the future by what you do in the present. Pay your bills, save money and stay optimistic that you will someday rise above your financial blunder.