After a bankruptcy, a 2nd mortgage loan is the best way to get cash. You can get a mortgage through online sub-prime lenders as soon as your bankruptcy ends. However, for rates that are close to conventional rates, it is best to wait two years before you build up a credit history.

Bankruptcy and Sub-Prime Lenders

Millions file bankruptcy each year due to a variety of reasons. Subprime lenders recognize this and are happy to lend to those who need it.

Subprime lenders are able to finance virtually everyone because they specialize in high-risk loans and unorthodox terms. Legitimate lenders can offer competitive rates and reasonable closing costs.

Bankruptcy Can Affect Your 2nd Mortgage Rates

Credit scores are most affected by bankruptcy in the first two years. After your bankruptcy, you’ll be eligible for “E”, the highest rate mortgages.

With a “C class” loan, rates can be better after a year of good credit. The rate is typically 3% to 5 percent higher than traditional rates. In two years you might be able to have excellent credit and get prime mortgage rates.

Loan After Bankruptcy

There are other factors that can affect your mortgage rates. You can boost your credit score by keeping a large portion of your equity and cash assets intact.

Compare Shopping to Get Better Rates

It doesn’t matter when you apply for a 2nd mortgage. Before you choose a lender, it is important to research loan rates. Each financing company will have its own way of determining closing costs and rates. It is important to compare loan estimates carefully to ensure that you receive the best rates and lowest fees.

Start with a mortgage broker site if you don’t have a particular lender in mind. You can find special offers by partnering with different companies. There are many lenders that you can choose from.

Be sure to include closing costs in your rate comparisons. Low rates may not be available if you have thousands of dollars in cash on hand. A home equity line credit may be an option if you wish to minimize loan processing fees.

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