If you recently filed for bankruptcy, you may be wondering if you can get approved for a home loan. You may also be wondering if buying a home after a recent bankruptcy is a good idea for you.

Although a bankruptcy can make it difficult to get approved for a home loan, it is still possible to get approved for a home loan. In fact, there are more and more bad credit loan programs coming out all the time. Subprime lenders are focusing more on helping people with bad credit achieve home ownership. This is mainly because bankruptcies continue to rise and there are an increasing number of people with bad credit looking for home financing.

Here are some reasons to consider home ownership after bankruptcy:

1. Increase your credit score – When you make your payments regularly, you improve your credit score. Once the prepayment penalty period ends, you should be able to refinance your home loan at a much lower interest rate. After your bankruptcy has been discharged for more than 2-3 years, it will be much easier for you to qualify for a lower interest rate home loan.

2. Increase the equity in your home – If you are only paying rent, you are throwing away your monthly payments. When you own a home, over time the value of the home increases and you are working towards owning an asset.

3. Get a home equity loan to consolidate debt or get the extra cash you need – Once you have purchased your home, as soon as 6 months later, you may be able to get a home equity loan on your home and consolidate any other debt you may have from your bankruptcy or debt that could not be included in your bankruptcy . Taxes and student loans will not be canceled in bankruptcy. You may also want to use the extra money to invest in a business venture or for needed home improvements.

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