Buying a House After Bankruptcy: It may be possible to get a home loan after Bankruptcy, but it can be more challenging. Many lenders consider discharged bankrupts to be high-risk borrowers due to their credit history. However, some non conforming lenders specialize in providing loans to borrowers with bad credit, including discharged bankrupts.
Here are some general points to keep in mind if currently discharged from Bankruptcy:
Discharge period: You must be discharged (1 day) from bankruptcy before you can apply for a home loan. In Australia, bankruptcy typically lasts for three years, after which you are considered discharged.
Credit history: Lenders will assess your credit history and financial situation to determine if you are a suitable candidate for a loan. Your credit report will still show your bankruptcy for a certain period (usually five years), which can impact your ability to secure a loan with a prime lender.
Non Conforming lenders: You may need to approach specialist lenders who cater to borrowers with bad credit or non-conforming loans. These lenders may charge higher interest rates and fees compared to traditional lenders, due to the increased risk associated with lending to discharged bankrupts.
Deposit: You may be required to provide a larger deposit than other borrowers to compensate for the increased risk. A larger deposit can also help demonstrate your ability to save and manage money responsibly.
Employment and income stability: Lenders will look at your employment history and income to assess your ability to repay the loan. A stable job and consistent income can improve your chances of getting a home loan.
Financial discipline: Lenders will also consider your current financial situation and how well you’ve managed your finances since being discharged from bankruptcy. Demonstrating responsible financial behavior and the ability to meet ongoing repayments will improve your chances of securing a loan.
Seek professional advice: It’s important to consult with a mortgage broker or financial advisor who can provide guidance tailored to your specific situation. They can help you navigate the complexities of getting a home loan as a discharged bankrupt and connect you with suitable lenders.
Please note that this information is general in nature and may not apply to your specific circumstances. Consult with a non conforming lender for personalized advice on home loans after bankruptcy.
Ray Ethell offers a wealth of experience to his clients, gained from over 20 years in the Finance industry, and prides himself on providing reliable customer focused service. As an independent mortgage consultant, Ray is able to find a product tailored to his clients’ individual needs, with relevant unbiased advice and recommendations.
- Cert lV in Financial Services (Mortgage Broking)
- Diploma in Financial Services (Mortgage Broking)