How to Get Financing after Filing Bankruptcy

If you're thinking about buying a home but have declared bankruptcy in the past, don't give up hope. There are still ways for you to be able to find a loan, even if your credit history is less than sterling.

Lenders make various kinds of home loans, normally graded from "A" all the way down to "D." The more problems that show up on your credit report--slow pays, late pays, or even bankruptcy--the lower the grade of loan you'll be able to qualify for. If you're employed and have a relatively good income, you'll get better terms, even though you won't qualify for a "Grade A" loan. The longer you've been at your current job, the better, because it shows stability.

Here are some general rules about the qualifications lenders look for before giving consumers the various grades of home loans:

To qualify for an AA loan, lenders must see no late payments or any other difficulties when they look at your credit history for the past two years. First, we'll look at the top of the line loans, all in the A grade category.

To qualify for an A+ loan, you can only have one late payment in that two-year time period. An A- loan is available to borrowers whose credit report shows two or three late payments, and have at least two credit cards. Borrowers in the A category will normally be qualified for all the various perks that lenders offer, such as low interest loans and low down payments.

But if you've had a bankruptcy in the past, you're choices are more limited, and you'll generally need a larger down payment.

For instance, a grade B loan can be obtained by borrowers who've been at their jobs for a reasonable length of time in as little as 18 months after declaring bankruptcy, assuming that they've been able to reopen at least one line of credit during that time and kept it current. Usually the lender will require 15% down, and the best interest rate the borrower can generally get is 6-7%.

A grade C loan will require good, steady employment, and may be available within a similar time frame as a B grade loan. The interest rate is generally higher, currently at about 8.5%, and the down payment requirements are considerably higher. For instance, a lender will normally require 20% down on $300,000 house or 40% down on a $500,000 home.

You'll need a significant amount of down payment to qualify for a grade D home loan, as well, and the interest rate will normally run between 9.95-10.7%, depending on your overall credit score. If you're employed and your credit score is above 500, you can put down as little as 30% on a $300,000 home or 45% on a $450,000 house. If you're self-employed, however, you'll need 45% down just to buy a $250,000 home.

If you're hoping to purchase a home, talk to your local lender to see what their criteria are for their various grades of loans. Even if you've had a bankruptcy in your past, that doesn't mean you can't buy a home. It just means it may take some time, you'll need to establish a strong employment history, and you'll need to save more money for a down payment than if the bankruptcy hadn't occurred.

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Forget what you've been told about credit. Get the Credit You Need to Buy Real Estate. Visit Real Estate Credit Help Center: http://www.recredithelp.com

The home builder's stock soars 11% after an announcement that there will be no action taken as result of an investigation into the company's accounting procedures.

Shares of Los Angeles-based KB Home soared on Wednesday after the home builder said an investigation by the Securities and Exchange Commission into the company's accounting and disclosure procedures had concluded and no enforcement action would be taken.

The Standard & Poor's/Case-Shiller index shows a modest 1% gain over May figures, with prices in Los Angeles, San Diego and San Francisco increasing. However, some experts predict that the expiration of federal tax credits will have a negative effect.

A closely watched national index showed Tuesday that home prices rose in June, the last month that a federal tax credit probably boosted sales. Many experts predict a drop in values in coming months without the popular government stimulus.

Their house is a very, very, very fine house, to borrow Graham Nash's own lyrics.

The number of homes in the $1-million-and-up slice of the market that have become bank owned has tripled during the last three years in Los Angeles County, and the trend has shown little sign of slowing.

Foreclosure is blind.

A Santa Monica residence completed in 2008 was inspired by historic homes in Belgium. It boasts 17th century limestone floors, Belgian bluestone details, elaborate ironwork and refitted antique doors.

This 2-year-old house inspired by the historic homes of Belgium feels as if it could be sitting in the countryside rather than in a Santa Monica neighborhood just blocks from the boutiques on Montana Avenue.

Despite earlier reports to the contrary, it turns out that your mortgage lender will not have to pull a second full credit report on you hours before closing on your home purchase or refinancing.

Renovations that reduce the number of bedrooms or bathrooms and poorly planned expansions may kill a sale in the future.

Every real estate agent has seen them: home "improvements" that turn out to be anything but, at least down the road when it comes time to sell. Instead of deal sealers, they are deal killers.

Question: Is a homeowner association legally responsible for the actions of any board member who has harmed any member of the association? What if the board member has moved away from the association when a lawsuit is pending against it?

The law regards this person as a tenant, even though he is not paying rent, so proper legal procedures must be followed.

Question: About a year ago I found out that a casual friend had been laid off and become homeless. I let him move into my apartment's spare bedroom free of charge. Now I want my privacy back. I have asked him to leave, but he doesn't appear to be making any effort to do so. A real estate agent says my friend is a trespasser, since we have no rental agreement or landlord-tenant relationship. She says I can call the police to have him removed or I can change the locks on a day when he is away. I don't want to get into any trouble, so I am writing to ask what my legal rights are.

U.S. sales fall for the third consecutive month to the lowest rate since 1999, pushing down stocks and fueling fears of a 'double dip' in the housing market.

The end of a popular government stimulus program drove home sales in July to their lowest levels in more than a decade, fueling fresh concerns about the economic recovery.