Mortgage KB

According to the editors of Bankruptcy Anaheim, Anaheim’s leading web site for information about personal bankruptcy, there are two very common questions people ask about mortgages and personal bankruptcy.

What happens to my mortgage if I have to file for personal bankruptcy, and will I ever be able to get a mortgage after I go bankrupt?

The answer to the first question about what happens to your mortgage if you declare bankruptcy depends on your situation.

If you own a house with significant equity, depending on where you live, you may lose your house. The house will be sold to pay off your mortgage. For further information, Canadian residents should visit www.bankruptcy-canada.ca, and Americans should visit www.bankruptcy-america.com, because the rules regarding houses and bankruptcy are different in each province and state.

If your house has limited or no equity and you want to keep paying your mortgage, in most places if the mortgage company agrees, you can continue to pay your mortgage, and keep your house while you are bankrupt.

The second question is more complicated:

If I declare personal bankruptcy, will I ever be able to qualify for a mortgage?

The answer is simple: it depends on you.

The fact that you have declared bankruptcy will appear on your credit report for up to ten years, so all lenders who do a credit check will know that you declared bankruptcy. This may make it more difficult for you to qualify for a mortgage.

But don’t give up hope. Mortgage lenders want to lend you money because they make money by lending. They charge interest. They want to charge you interest, but they can only do that if they lend you money. What they are most interested in is whether or not you will pay them back. They are less interested in what happened in the past; they care more about the future.

So how do you demonstrate that you can pay them the money back?

First, you will need a down payment. By saving for a large down payment, you are proving to the lender that you are responsible with your money. If you can save money for a down payment, you are probably also able to make your monthly mortgage payments. If you have a bankruptcy on your credit report, the larger the down payment, the easier it will be to qualify for a mortgage.

Remember also that a mortgage is a loan secured by your house, so the bank is taking very little risk if you have a sufficient down payment, because if you don’t pay, they can sell your house to get their money back.

Secondly, the higher is your income better is your financial condition. So, to rebuild your credit, work hard at your job, as that will make the process easier.

It is possible to get a mortgage after bankruptcy, but you must be disciplined enough to save money to get your financial affairs back on track.

Author Information: Bankruptcy Anaheim
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