Looking to buy a house in Louisville, KY, but worried about finding a mortgage because of a bankruptcy? Bankruptcy is more common now and banks will consider making loans within two or three years after the bankruptcy is discharged - as long as your credit history has been pristine since the bankruptcy. 

Expect to be charged higher interest rates or be required to come up with a bigger down payment, though. Even if you have excellent credit history, a larger down payment usually means the best interest rates, and if you have a bankruptcy on your credit report it becomes especially important to put down as much money as possible.

Your past credit report is an important factor, but keep in mind there are several other financial indicators that are also considered.

Your employment history and income. If you've had steady employment for a long period (more than two years) and you've received regular pay raises and promotions, this counts heavily in your favor when applying for a home mortgage.

Your debt-to-income ratio. Bankruptcy either discharges or restructures your debt for a certain period of time, allowing you the breathing room to clear up your credit history. If you avoid taking on large debts after bankruptcy, your debt-to-income ratio should be fairly low.

The loan-to-value ratio of the home you'd like to buy. It's possible to find great real estate deals where the asking price on the home is far below the appraised value of the home. As you talk to mortgage loan officers, point out how much equity you'll immediately have in your new home.

Your down payment. Obviously, the more money you pay up front the less money you borrow overall. Saving the ideal 20 percent down payment makes you look much better to a mortgage company, even if you have a bankruptcy on your credit.

It is possible to get a mortgage after bankruptcy. You probably won't get the lowest interest rate or the most ideal terms, but it's possible to refinance a mortgage in a few years after building equity in the home. Be patient and persistent, and discuss your finances with the one of the Brad Long Groups recomended lenders.

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