Home finance and loans from your home mortgage company
Home Loan For An Individual Bankrupt
Can A Bankrupt Apply for A Home Loan?

Bankruptcy is a common reality for many people. Years ago, if someone declared bankruptcy, his or her hopes for a solid financial future were ruined but nowadays, the stigma attached to bankruptcy has waned. In fact, people who have been bankrupt are now a specialized niche for whose business private home loan lenders aggressively compete.

While it is true that most banks will not home finance the average bankrupt person, many private home loan lenders or B lenders focus their business on “not so easy to place” home loans. The private home loan lender has many investors who enjoy the opportunity to earn higher than normal interest rates.

Although the obvious reason to use a private home loan lender is to obtain your home finance, there are probably eight more excellent reasons why a bankrupt individual should pursue the private lender home loan route when seeking household finance.

Ten Reasons A Bankrupt Individual Should Contact Private Home Finance Lender

1. Dignity
Indeed, it is embarrassing and demoralizing to go to an appointment for a home loan all prepared with your documentation and then the person on the other side of the home loan lender desk cuts you off before you even start due to your bankrupt status and spotted credit history.

But, there is good news. Because mortgage brokers and private home loan specialists are in the business of financing difficult deals, they are only too happy to have you apply for one of their home loans.

If you have contacted the private home loan lender because you have declared bankruptcy, they know why you are there. You do not have to go into the meeting sheepishly as though you are damaged. Assuming you are above board and on the level, the household finances lender will welcome you.

2. Good Chance of Being Financed
In most instances, unless you have committed fraud and/or were required to declare bankruptcy under suspicious circumstances, the home loan lender will explore every avenue to obtain the right home loan for you. Home finance lenders that specialize in placing bankrupt individuals are more eager than other traditional lenders who say no right in the beginning.

Private home loan lenders have a vested interest in finding you a home finance. First of all the lender receives a broker’s fee or commission on putting the deal together plus he is able to place an investor’s money earning the investor considerable returns on the home loan.

Also, the private home lender may not be a brokerage at all, but an individual investing his own funds. He might welcome the opportunity to realize an investment with excellent returns on home finances.

Financial institutes and their employees, on the other hand, have no incentives to home finance you. In fact, to make their numbers look better; it would be easier to reject your home loan application for fear of falling or decreasing returns.

3. Rebuild Credit
Once you start paying on a home loan, you will have the opportunity to rebuild your credit. The payments from your home loan with the brokerage or private home finance lender will be documented on your credit report allowing you to show more traditional institutes that you are willing and capable of paying down your liabilities.

After two or three years of paying the home loan, you may even qualify for a household finance from the bank. Again, everything will depend on one’s personal situation and the policies of the individual household finance institute, but you will at least be in a position to inquire with your head held up high. The stress will not consume you, as you know you have a back-up plan with the private home loan lender.

4. More Personal than the Bank
Because the household finance lender is a business and a business that is competitively fierce in today’s market, the attitude toward the home loan applicant is much different than traditional institutes providing home loans.

The private home loan lender generally treats you more like a person than a number or an application. The household finance lender has the flexibility to make arbitrary decisions and has to nothing to gain by lying to you and not obtaining the home loan.

The private home lender wants to write deals and his business and financial future depend on making commissions and staying in business.

5. Permitted to Write Riskier Deals
Although no company likes to lose money, the private home loan lender will take risks that other institutes would not even consider good business. Again, the home finance business:
• has the flexibility to make decisions regarding home loan applications,
• may not be required to answer to a board of directors examining every move and every decision on home finance deals,
• is permitted at times to make unilateral decisions depending on whether the money is his own or not,
• is actually encouraged to find more business by marrying potential investors with home loan applicants and
• does not answer in most instances to traditional shareholders that may demand safe investments.

6. Credit Score is Not Top priority
The fact that you are using a private home loan lender normally suggests that your credit may be less than perfect. You most likely will tell the home finance specialist that point up front so basically the credit score is not the priority in determining whether you will receive a home loan or not.

For home finance experts who specialize in finding loans for individuals who were previously bankrupt, they are not too concerned about your credit report and debt ratios. The credit score is actually down-played and not the focal point in the home loan application.
7. Finance Down Payment
In some instances, the private home finance lender will help with financing the down payment on the home purchase. It always a good idea to inquire as to the home loan lender’s policies when submitting an application for a home loan.

8. Own Your Own Property
In order to get out from under monthly rental payments and literally wasting money by having no equity to show for your hard earned effort, contacting a home loan lender may put you in your own home sooner than you think. You may be able to purchase your home instead of renting and paying off someone else’s home loan.

9. Building equity in your own home is obviously more desirable and allows the home loan borrower to hold an asset instead of a liability.

Some private home finance lenders do not write traditional deals and you never know if they can help you without submitting a home loan application or at the very least calling them and arranging a meeting to talk about the possibility of a home loan.

10. In closing, finding a home loan lender may still be difficult depending on your personal circumstances. You will need to put in a lot of work doing research, collecting documents and applying for your home loan. But in the end if you are accepted for a home finance, you know you will be able to start your future fresh knowing you are building equity in your own home. A home loan may provide you the opportunity of moving on in a positive manner.

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