Why You May Still Qualify for an FHA Loan Even After a Bankruptcy
When you file for bankruptcy, this means that you no longer have the capability to pay off your debts. Bankruptcy entails various financial drawbacks such as not being able to acquire a conventional mortgage, not being able to invest in trading like forex or CFD trading. Some people who are declared bankrupt find it difficult to apply for loans because lenders are not very trusting to these kinds of borrowers. Fortunately, the Federal Housing Administration gives hopes to individuals, who have filed for bankruptcy, to apply for a mortgage. By creating the FHA loan, the FHA helps numerous people with bad credit to own a house through financing. If you have filed for bankruptcy, study how you may still qualify for a FHA loan. This type of mortgage can be your best option in becoming a homeowner.
The FHA loan was designed to expand the homeownership. Since there were a lot of people who were incapable of applying for a mortgage, the FHA developed a loan that would cater to the needs of individuals
with low income and would protect the lenders in case of defaults. Today, there are FHA loans that come with low interest rate and closing costs, which attract more people to acquire this kind of mortgage. In addition, the FHA has down payment assistance programs to help borrowers who do not have sufficient amount of money to apply for loans.
Another feature of the FHA loan is it does not require borrowers to have perfect credit for them to become qualified. Even if your credit history says that you have filed for bankruptcy, you are still eligible of applying for an FHA loan.
Chapter 7 bankruptcy, for example, means that you have to liquidate your assets to pay off your creditors. This means you might have to liquidate investments from your CFD trading, mutual funds, and other forms of passive income. If you declared this kind of bankruptcy, you still have the chance to inquire for an FHA loan. Any record of bankruptcy does not automatically disqualify a person from applying for one.
Getting an FHA loan can become less of a burden when your lender sees that you have reestablish your credit and that you have good employment. These factors make it easier for them to decide to give you this kind of mortgage.
In some cases, however, you might still need to pay your creditors by following a financial reorganization plan that a bankruptcy court has approved. It may take you three to five years before you can complete your financial plan and pay off your debts, but this is normal provided that you do not skip on your payments. If you are planning to acquire an FHA loan, keep in mind that you should have promptly paid some of your debts and followed your financial reorganization plan for at least a year. Furthermore, you must be employed and show that you have started to have a good credit score so that you can be qualified for this type of loan.
