How to obtain Home Loans with Discharged Bankruptcy?

If you are a discharged bankrupt who is now looking to get a home loan or considering refinancing your mortgage, you will experience that most mainstream lenders/credit providers choose not to offer loans to discharged bankrupts or they apply strict credit guidelines.

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 specialise 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 aside as your deposit amount. As this should put you in a safe range, and should increase your chances of getting home loan 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 (e.g. 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 (e.g. 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:

>> Don't 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 purposes (e.g. business or consumer purposes).

What Types of Home Loans can I Consider?

These will depend on the specialised lender/credit provider you choose. Here is a list of loans you can consider:

>> Basic standard full doc home finance; or

>> Low doc or no doc home finance - They are useful if you are self-employed and cannot 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 specialises 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 bankruptcy home loans.

Singh Finance is reputed Australian finance brokerage firm that will help you in obtaining discharged bankruptcy home loans. The firm employs talented expert finance brokers who will go the extra mile in providing your better rates on home mortgage refinance. Enquire online or call on 0424 190 908.

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Keywords: discharged bankruptcy home loans, home mortgage refinance

By: Frank Zelasko

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