If you are a homeowner or have recently become interested in the real estate market, you might understand why so many people in Columbia, SC, are intimidated by the mortgage loan process. Not only do lenders ask intrusive questions which might sound a tad bit too personal during the interview, but with rules and regulations for lending getting stricter with each passing day, it is almost necessary to keep everything from credit scores to the paperwork, picture perfect.
Despite the strict process, most people will be relieved to know that in some cases, it is still possible to land a mortgage when bankrupt. Read on to find out what needs to be taken into consideration when you are trying to land a mortgage when bankrupt.
One of the most important factors which determine the approval or denial of your mortgage loan application is your credit report. The credit report or credit history of a person gives a complete picture of the financial situation of the applicant. Since the credit report reveals so much, your lender might thoroughly check your credit report to see whether improvement can be expected based on your history.
Once your bankruptcy has been discharged, it is imperative to ensure that your credit report does not have any more negative signs since these can be extremely dangerous for your credit report. If the lender notices any downward trends in your credit report after your bankruptcy has been discharged, your chances of landing a mortgage can decrease even more.
Time since your bankruptcy
The amount of time which has passed since your bankruptcy is another factor which influences your chances of landing a mortgage when bankrupt. Even though the duration varies depending on the lender, in most cases, the required amount of time which has passed since you filed for bankruptcy is two years. Some lenders might even require a time period of up to five years to have passed before you can apply for a mortgage. However, if your credit status at the time of applying for a mortgage is exceptionally good, lenders may make exceptions.
Reason for bankruptcy
Bankruptcy is always an inconvenience. The reasons of your bankruptcy, however, have a great impact on the approval of your mortgage application.
If you went bankrupt due to reasons and circumstances which were unavoidable, like extreme medical emergencies or the loss of a job, it is possible for your lender to be lenient. However, if you went bankrupt because of frivolous spending habits or lack of financial responsibility, you should not expect your mortgage application to be approved by any lender in Columbia, SC.
Even if you have filed for bankruptcy, it is imperative for you to try to maintain a good credit status at all times and keep in mind the factors above which can influence the approval of your mortgage application.
To learn more about mortgages in Columbia, SC or to find the best property in the city, contact I Sell This Town.