How to Get Financing after Filing Bankruptcy

If you're thinking about buying a home but have declared bankruptcy in the past, don't give up hope. There are still ways for you to be able to find a loan, even if your credit history is less than sterling.

Lenders make various kinds of home loans, normally graded from "A" all the way down to "D." The more problems that show up on your credit report--slow pays, late pays, or even bankruptcy--the lower the grade of loan you'll be able to qualify for. If you're employed and have a relatively good income, you'll get better terms, even though you won't qualify for a "Grade A" loan. The longer you've been at your current job, the better, because it shows stability.

Here are some general rules about the qualifications lenders look for before giving consumers the various grades of home loans:

To qualify for an AA loan, lenders must see no late payments or any other difficulties when they look at your credit history for the past two years. First, we'll look at the top of the line loans, all in the A grade category.

To qualify for an A+ loan, you can only have one late payment in that two-year time period. An A- loan is available to borrowers whose credit report shows two or three late payments, and have at least two credit cards. Borrowers in the A category will normally be qualified for all the various perks that lenders offer, such as low interest loans and low down payments.

But if you've had a bankruptcy in the past, you're choices are more limited, and you'll generally need a larger down payment.

For instance, a grade B loan can be obtained by borrowers who've been at their jobs for a reasonable length of time in as little as 18 months after declaring bankruptcy, assuming that they've been able to reopen at least one line of credit during that time and kept it current. Usually the lender will require 15% down, and the best interest rate the borrower can generally get is 6-7%.

A grade C loan will require good, steady employment, and may be available within a similar time frame as a B grade loan. The interest rate is generally higher, currently at about 8.5%, and the down payment requirements are considerably higher. For instance, a lender will normally require 20% down on $300,000 house or 40% down on a $500,000 home.

You'll need a significant amount of down payment to qualify for a grade D home loan, as well, and the interest rate will normally run between 9.95-10.7%, depending on your overall credit score. If you're employed and your credit score is above 500, you can put down as little as 30% on a $300,000 home or 45% on a $450,000 house. If you're self-employed, however, you'll need 45% down just to buy a $250,000 home.

If you're hoping to purchase a home, talk to your local lender to see what their criteria are for their various grades of loans. Even if you've had a bankruptcy in your past, that doesn't mean you can't buy a home. It just means it may take some time, you'll need to establish a strong employment history, and you'll need to save more money for a down payment than if the bankruptcy hadn't occurred.

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Forget what you've been told about credit. Get the Credit You Need to Buy Real Estate. Visit Real Estate Credit Help Center: http://www.recredithelp.com

Broadway north of 96th Street was once a vibrant but shabby area and before that it was farmland.

A cabin in Heber City, Utah, a Gothic revival in Seneca Falls, N.Y., and a condo in Milwaukee.

Adam Levy lives in a 10-story building that he converted into seven spacious floor-through apartments, including his own duplex penthouse that he finally completed last fall.

Surrey, a county to the southwest of London, suffered a real estate setback in 2008, after years of steady price increases.

Only about 100 of 790 buildings that are eligible for hourly prices have opted for the Con Ed service.

Backers said Northwest Florida Beaches International would bring new businesses and residents to the Florida Panhandle; critics said it would also bring environmental problems.

Renters were a godsend when the market went into hibernation. But now that buyers are stirring, some owners wish their tenants would just go away.

A bedroom door: That’s what Meghan Galewski and James Gonzalez wanted most.

Vinegar Hill is nudged into a corner of the waterfront that seems, at least in part, forgotten by time.

Little more than a week after buying an apartment Arash Yomtobian’s employer, Lehman Brothers, announced plans to declare bankruptcy.

Building is stalled as the Port Authority and the developer, Larry A. Silverstein, debated how much government should invest in private development.

The Obama administration will offer homeowners $1,500 to sell for less than the mortgage balance.

A city agency and nonprofit groups build or rehabilitate moderate-income housing, then scrutinize buyers’ credit. And they avoid the national foreclosure crisis.

On 43rd Street off Eighth Avenue is a new seven-story building that offers low-income housing and affordable rehearsal space, which are both in short supply.

Since 1937 the New York Society Library, which is the oldest cultural institution in New York, has been housed on East 79th Street.

The State of New York Mortgage Agency, or Sonyma, is offering 30-year affordable-housing loans at 4.75 percent.

The phone, once a real estate agent’s primary — well, only — mode of communication with a client, is making a comeback of sorts in these lean times.

Plots in a low-key mobile-home park of 199 trailer-condos interspersed with a few stick-built shacks in Montauk Shores are available, but the structures cannot be replaced by houses.

As of April 21, Mr. Jaccom, 54, will become the chief executive of the tristate hub of Colliers International, a full-service commercial real estate brokerage company.

A look at the strategies of buyers venturing into the market shows Westchester as no longer being in free fall but still poised precariously.

Felipe Rein Acebo-Gomez bought a 1,900-square-foot apartment that came with a three-story 1,300-square-foot casita.

The new owner of John Lennon and Yoko Ono’s Nutopian Embassy, “a conceptual country” with no boundaries and “no laws other than cosmic,” has put it on the market.

Susie Essman has decided to sell the two-bedroom two-bath apartment at the Straus Park Condominium that she uses in New York City.

Matthew Malin and Andrew Goetz, the founders of MALIN + GOETZ, a unisex skin care company, have decided to buy a farmhouse in the upper Hudson Valley.