Today, millions of people go through divorce and/or bankruptcy. In this situation, it looks as if buying a house would be an impossible situation but this is not true. If you have gone through a divorce and/or bankruptcy, have a good income, but have no down payment for a mortgage loan, do not give up yet. In fact, there are wonderful new programs backed by the government designed specifically for people in your situation.
Just remember that options are available, which would allow qualified borrowers to finance the entire purchase of a house. The good news is that many solutions mean buying a house without having a down payment. However, the buyer’s credit history should be good and in the case of having a bankruptcy, some issues with qualifying may arise. Now, if your bankruptcy is more than two years old and since that you’re your credit has been good, chances are you would be able to qualify for a home.
Even so, your current situation should be examined so you can make the decision on the best time to purchase. For instance, having gone through a divorce means you might be on a tight budget. In this case, a lender will look at your situation more favorably if you build up your bank accounts before applying for a home loan. After all, they want to secure the loan.
When looking at mortgage loans, your credit score will be an important factor. To determine your score, you can contact TransUnion, Expedia, and Experian to look at your current credit report. While there is a fee involved, it would be to your benefit. Today, the average credit score is around 650. Therefore, anything above that would put you in a better position for qualifying for a mortgage loan.
If you find your credit score falls within the “fair” range, then you need to take some time to clean it up before you apply for a loan. Typically, a six months to a year will make a huge difference, allowing you time to pay off debt, put some money in savings, and eliminate any negative credit on your report.