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Can You Buy a Home With a Bankruptcy in Your Past?

Can you buy a home with a bankruptcy in your past - Port A Realtor
There’s good news if your credit is less-than-perfect: You can still buy a home with bad credit from a bankruptcy.

Can You Buy a Home After a Bankruptcy?

You can absolutely purchase a home if you’ve had a bankruptcy in your past. The farther back it is, the better your chances of securing a better interest rate, but a bankruptcy does stay on your credit report for about 10 years.
You might be surprised to learn that if you wait just four years after filing bankruptcy, you can begin to get better interest rates on a conforming loan.

How Long Must You Wait After Bankruptcy to Buy a Home?

The period of time you have to wait after a bankruptcy varies based on the amount of money you need to borrow and the type of lender you use.
Some hard money lenders will give you a loan to buy a house after just 6 months have passed—but there’s a catch. They’ll typically require a 20 to 35 percent down payment, and the interest rate is likely to be fairly high.
Other lenders have different requirements, so it’s a good idea to get in touch with your bank and a few lenders to see what they have to say.

Are You Buying a Home in Port Aransas?

If you’re looking for a home in the beautiful city of Port Aransas, we’d love to help you.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll begin searching right away.
While you’re here, check out our:

You can also check out:

Filed under: Blog, Buying by Julie Woodward
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Let's Talk About FICO Scores

FICO Scores and Buying a Home in Port Aransas or North Padre Island
Your FICO scores affect your interest rate when you’re buying a home (and contrary to popular belief, you can buy a home after a foreclosure or bankruptcy if you work to improve your credit).

What Are FICO Scores?

Your FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use your FICO score to find out whether you’re a big risk (and whether they’re willing to take that risk on you).

What’s a Good Credit Score?

Credit is scored on a big scale ranging from 300 to 850. The higher the number, the better your credit.
According to The Balance, here’s the breakdown on what interest rates you may qualify for based on your FICO credit score, assuming that you have a 10 percent down payment and meet all the lender’s other requirements:

  • FICO Score of 600 to 640: + 1.625 percent over prevailing rate. This means if a borrower with good credit is paying 5.875 percent, your interest rate would be 7.5 percent.
    A $200,000 amortized loan at 7.5 percent would give you a monthly payment of $1,398.
  • FICO Score of 560 to 580: +2.875 percent over prevailing rate. This means if a borrower with good credit is paying 5.875 percent, your interest rate would be 8.75 percent.
    A $200,000 amortized loan at 8.75 percent would give you a monthly payment of $1,573.
  • FICO Score of 540 to 559: +3.425 percent over prevailing rate. This means if a borrower with good credit is paying 5.875 percent, your interest rate would be 9.3 percent.
    A $200,000 amortized loan at 9.3 percent would give you a monthly payment of $1,653.
  • FICO Score Under 540 to 500: +3.875 percent over prevailing rate. This means if a borrower with good credit is paying 5.875 percent, your interest rate would be 9.75 percent.
    A $200,000 amortized loan at 9.75 percent would give you a monthly payment of $1,718.
  • FICO Score Under 500: +6.25 percent over prevailing rate. This means if a borrower with good credit is paying 5.875 percent, your interest rate would be 12 percent. With a FICO of less than 500, you will not qualify for a 90 percent loan, but you may qualify for a 65 percent loan, therefore, you need to increase your down payment from 10 percent to 35 percent.
    A $200,000 amortized loan at 12 percent would give you a monthly payment of $2,057.

Are You Buying a Home in Port Aransas?

If you’re looking for a home in the beautiful city of Port Aransas, we’d love to help you.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll begin searching right away.
While you’re here, check out our:

You can also check out:

 
 

Filed under: Blog, Buying, Credit Scoring by Julie Woodward
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Can You Buy a Home After Foreclosure or Bankruptcy?

can you buy a home with bad credit - port aransas homes for sale
If you really want to buy a home but your credit score is holding you back, there’s good news: you may be able to buy a home in Port Aransas with bad credit.

The Bottom Line on Credit

This isn’t financial advice—we’re not financial advisers. However, you may be relieved to find out that even if you’ve had a bankruptcy or foreclosure, you may not be automatically disqualified from buying a home in Port Aransas.

How is Buying a Home With Bad Credit Different From Buying With Good Credit?

You can buy a home with bad credit, but you’ll most likely pay more than a borrower who has a high credit score will.
Lenders are in business to make money, and they can’t do that without assuming a certain amount of risk. While some buyers need to do major work on their credit reports in order to qualify for great rates, the truth is that many buyers who think they won’t qualify for a mortgage actually will.

After a Foreclosure or Bankruptcy: What You Need to Know

If you’ve had a foreclosure or a bankruptcy, here’s what you need to know:

  • A bankruptcy can stay on your credit report for up to a decade.
  • You’re more likely to get better rates and more favorable terms if you wait about four years after filing for bankruptcy before applying for a mortgage.
  • FHA guidelines only require that you wait two years after a foreclosure, and with an FHA loan, you could put as little as 3.5 percent down on a home.
  • FHA guidelines only require that you wait three years after a short sale.

Are You Buying a Home in Port Aransas?

If you’re looking for a home in the beautiful city of Port Aransas, we’d love to help you.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll begin searching right away.
While you’re here, check out our:

You can also check out:

 
 

Filed under: Blog, Buying by Julie Woodward
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Can You Buy a Home in Port Aransas With Bad Credit?

Can You Buy a Home in Port Aransas With Bad Credit
DISCLAIMER: This is not intended to replace financial advice; we’re not financial advisers. If you need financial advice, you should speak with a licensed financial adviser.
Can you buy a house with bad credit?
Let’s talk about what constitutes “bad credit” for the purposes of buying a home so you know exactly what you need to do if you’re ready to make the leap.

Buying a Home With “Bad Credit”

Typically when lenders refer to someone with bad credit, they could mean that the person has excessively high credit card debt, late payments, a bankruptcy, or a foreclosure.
The most obvious ways to improve your credit are to pay down your debt and make timely payments. As for bankruptcy and foreclosure, time is typically the cure.
What you can do is talk to a lender that specializes in helping borrowers with bad credit. Your lender can point you toward special programs that will improve your credit and show you how you can finance a home, even with a bankruptcy or foreclosure on your record.

Time Frames for Foreclosure and Bankruptcy on Your Credit Report

Before you assume that you have bad credit, order your free credit report from Annual Credit Report. Thanks to the Federal Trade Commission, everyone’s entitled to one free copy of his or her credit report every year.
A bankruptcy can stay on your credit report for up to 10 years. The farther the bankruptcy is in your past, the more favorably lenders may look at your credit profile.
If you’re using a conforming loan, you typically need to wait about 4 years after a bankruptcy or a short sale.
If you’re using an FHA loan, you must wait 2 years after foreclosure. The good news? After 2 years, you may qualify to pay as little as 3.5 percent down. If you’ve had a short sale, you’ll have to wait 3 years.

Are You Buying a Home With Bad Credit in Port Aransas?

If you’re buying a home in Port Aransas, call us at 361-563-7788 right away. Tell us what you’re looking for and we’ll help you find it.
In the meantime, browse our Port A real estate listings in some of the most popular communities:

 

Filed under: Blog, Buying, Consumer Tips, Credit Scoring by Julie Woodward
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