If you are looking for a home loan after discharging bankruptcy, you will find that most mainstream lenders / credit providers will reject your loan application.
Can I still get a Home Loan?
While it is challenging as a discharged bankrupt to get a home loan, it is still very much possible because there are lenders / credit providers that specialize in this "niche" market.
How Long after my Discharge can I apply for a Home Loan?
The longer you have been discharged, the better it is for you. Here is a list of when lenders / credit providers will consider your request for home loans after bankruptcy;
>> Most lenders / credit providers allow discharge bankrupts to borrow just as soon as their term of bankruptcy finishes; and
>> Others have a minimum number of years before discharged bankrupts can apply for a home loan.
How much can I borrow as a Discharged Bankrupt?
The amount you can borrow will vary for each lender / credit provider. However, most lenders / credit providers will consider loans of up to 80% of your security property's value.
What Amount of Deposit do I Need?
In most instances, it would be ideal to have at least 20% of your home's purchase price set as as your deposit amount. It will put you in a safe range, and increase your chances of getting approved.
What should I consider when applying for a Home Loan?
Here is a list of things to keep in mind when you are applying for a home loan and you are a discharged bankrupt:
>> You should be able to demonstrate that you have a secure and permanent employment;
>> If you are self-employed, you should be able to produce the last two years tax returns or financial statements;
>> You should have a minimum of unsecured liabilities as possible;
>> You should conduct all your financial affairs in an excellent manner (eg if you are paying rent through a rental estate agent, paying your bills on time will help you);
>> You should be able to provide a sound and transparent explanation regarding the situation that led you into bankruptcy (eg critical illness, etc.);
>> You should provide evidence as part of your loan application process, to indicate that this bankruptcy was a one-off situation, and it was well beyond your means to avoid.
Will I Be Charged any Fees and Higher Interest Rates?
As a discharged bankrupt, here is a list of factors to consider when choosing a discharged bankruptcy loan:
>> Do not expect very low-interest rates as your loan interest rates may be higher than the average rates; and
>> You may want to consider the fees that lenders / credit providers will charge on top of the interest rates.
What Loan Purpose can I consider?
Discharged bankruptcy home loans can be used for any worthwhile purpose, such as:
>> Owner occupied property home purchase;
>> Refinancing home mortgage; and
>> For cash out opportunities (eg business or consumer purposes).
What Types of Home Loans can I Consider?
These will depend on the specialized lender / credit provider you choose. Here is a list of loans you can consider:
>> Basic standard full doc home finance; Egypt
>> Low document or no document home finance – They are useful if you are self-employed and can not provide any proof of income, such as recent tax returns.
Take Help of a Finance Broker
When your credit has been damaged following a bankruptcy, you have to be more cautious when it comes to your finances. It is strongly recommended that you obtain expert advice from a finance broker who specializes in providing home loans with a discharged bankruptcy. Here is a list of skills your finance broker should have to assist you:
>> Your finance broker should be able to complete a pre-assessment of your loan application to find you the best possible solution and option; and
>> Your finance broker should have a clear understanding of the lending policies, guidelines and standard requirements for discharged bankrupt home loans.