What is a bankruptcy home loan?
Many people have the perception that a bankruptcy home loan is impossible to get. This simply is not the case. A bankruptcy home loan is designed specifically for people with adverse (bad) credit history. It can be used to purchase a new home or to free up cash in a property that you already own.
The loan can be used for almost any purpose. The main ones include:
- Avoiding bankruptcy through debt consolidation
- Buying a house after bankruptcy
- Home Improvements
- Buying a car after bankruptcy
Can I get a bankruptcy home loan?
When a lender considers your application for a bankruptcy home loan, they will assess the risk that you pose. If you are looking to buy a property, they will usually seek a deposit so that the value of the house is more than the amount that you borrow. This will benefit you too as the greater the deposit, the better rates you can get.
If you are looking to release cash that is tied up in an existing property, you will find it easier to borrow as you do not need to raise a deposit.
Other factors will be considered such as ability to repay (very important), occupation and marital status.
How do I get a good deal?
As with any financial product, shopping and comparing is the key to obtaining a good deal.
More favourable terms on a bankruptcy home loan can be achieved if you have a good deposit or good equity in the property.
Make sure your credit report shows that you have been discharged from your bankruptcy. It may also help to add a note explaining the reasons for your bankruptcy.
