It has been a very tough few years for most of us in the country. With high unemployment, a weak economy, poor stock market returns, and a real estate downturn, it is a tough time for us all. The west coast, especially Las Vegas, has seen a huge hit to housing prices.
Many Americans have filed for bankruptcy over the past few years as well. With the mounting bills, unexpected expenses, and other things that come up, it is no surprise that more and more people have to file bankruptcy. While this is never a good thing, it does not mean you cannot ever get a home loan again. There are many home loan options to consider if you have filed for bankruptcy.
The first option is to save up as much cash as possible so you have a low loan to value ratio. What this does is give you more equity in the property which will allow the banks to view you as a lower risk of defaulting on the loan. If you do, they can just take the equity you had to offset their costs. I suggest a minimum of 20% cash down in order to get the best real estate deals in Las Vegas.
If you cannot get a large amount of cash after your bankruptcy another option is to have high paying jobs in order to reduce your debt to income ratio. This also reduces the risk on the bank and will make them much more likely to give you a loan. Banks like to make safe mortgages and will do all they can to help you but they have to draw a line somewhere. If you do not make a ton of money then consider getting a second job or start your own business. They will want proof of income so be sure to save all of your documentation.
It is often beneficial to try and apply for a home loan at the place where you already do your banking. If you have all your checking and savings accounts there they will know that you are a good customer and have the ability to save money. If you also have a car loan there it will show you can pay your bills on time. This will help them approve your loan as you will be deemed less risky.
While all those things can help you get a mortgage after a bankruptcy, it is still no walk in the park. Many times your credit score will need improving before you can get approved. Some people recommend waiting a while afterward so you can build up your score quickly. If you make on time payments and do not open any more credit cards, your score will improve each month. Aim for a score above 620 to qualify. FHA loans are very popular these days as they help people get home loans that would not ordinary qualify. This is normally the best route to go.
However, if you are a veteran you should apply for a VA loan. They have special treatment to veterans and it should be a bit easier to qualify than a traditional loan. They have some different requirements that you may need to research before applying.
One bright spot in the downturn is that home prices are at an affordable place here in Las Vegas. You can get a house for almost half of what you could just a few years ago. New home loans after bankruptcy are hard to get, but there are options if you play smart and do the right things. Be smart with your money and you could get one of the best deals in years.