|April 20, 2017||0|
While bankruptcy has lots of financial impacts, it surely doesn’t mean the end of the world. Many folks file for bankruptcy for plenty of reasons, and this number only increases with the difficult economic conditions that we encounter today. According to reports from the Australian Financial Security Authority (AFSA), there were 7,466 cases of bankruptcy in Australia in the September 2014 quarter alone. Seeking bankruptcy advice is critical so you become aware of exactly what transpires financially when you declare bankruptcy.
There are two kinds of bankruptcy: undischarged bankruptcy and discharged bankruptcy. Undischarged bankruptcy indicates that you’re still in the process of bankruptcy and are unable to secure any kind of loan. Discharged bankruptcy implies that you are no longer bankrupt, and can obtain a loan with numerous specialist lenders. Bankruptcy typically lasts for three years but can be lengthened in some scenarios.
Unfortunately, the banks do not specify the reasons for your bankruptcy and this can make it very challenging to get a home loan approved when you are eventually discharged. Whether you will be able to buy a home after bankruptcy relies on a number of factors, including the type of loan you’re looking for and how you handle your credit rating once declared bankrupt. What is certain is that your spending capability will be limited, and repossession of property is typical.
Can you get a home loan approved after bankruptcy?
There are a variety of specialist lenders offering home loans to clients that have been discharged from bankruptcy for as little as one day. Whilst most of these loans have a higher interest rate and charges, they are nonetheless an option for those that are interested. In many cases, a larger deposit is needed and there are stricter terms and conditions compared to standard home loans.
There are various differences between lenders for discharged bankruptcy loan approvals. A few lenders will even provide reduced rates to individuals whose finances are in good shape and who have good rental history, if applicable. The period of time between your discharge and loan application will equally impact the end result of your application. Two years is usually recommended. In addition, sustaining a steady income and employment are also matters which will be considered. Most bankrupt individuals will also make an effort to attempt to increase their credit rating promptly to decrease the hardship of bankruptcy once discharged.
Points to consider when applying for a home loan once discharged.
Picking out an appropriate lender is key, so it’s a smart idea to select a lender that not only grants loans to discharged bankrupts but one that is prominent and credible. By doing this, you’ll feel comfortable that you’re receiving decent terms and conditions and your application is more likely to be approved. There are a number of questionable lenders on the market that take advantage of the financially vulnerable, so please beware. Another significant aspect to take into account is that you should not apply to more than one lender at a time. Every loan application appears on your credit history, and multiple applications at the same time are viewed negatively by lenders.
Pros and cons of home loans for discharged bankrupts
You can still a loan. Despite the fact that it may be complicated, it is still conceivable for discharged bankrupts to get a home loan approved.
The longer you’ve been discharged, the easier it gets. Spending time restoring your finances shows the lenders that you are financially responsible.
Your credit rating will improve. Basic tasks like paying your bills on time and producing steady income will improve your credit rating.
You cannot get a loan until you are discharged. Many lenders will not approve any loans to people that are undischarged to prevent endangering any additional financial distress.
Increased rates and fees. Usually, interest rates and fees will be increased for discharged bankruptcy loans. You can only receive lower interest rates with a larger deposit.
Record of bankruptcy. You will have a record of bankruptcy on your credit history for seven years after discharge, and your name will always be on the National Personal Insolvency Index (NPII).
Bankruptcy is never an enjoyable experience, but it doesn’t mean that you’ll never own a home again. As a result of the complexity of bankruptcy, it’s critical to seek professional advice from the experts to make sure you understand the process and therefore make prudent financial decisions. To find out more or to talk with someone about your circumstances, contact Fresh Start Solutions Darwin on 1300 818 575 or visit https://freshstartsolutions.com.au/bankruptcy-darwin