Getting a mortgage with low fico and bankruptcy is possible, but will require you to do several things on your part to show lenders that your are trying to improve your financial and credit situation.
You should also consider a method known as "piggybacking credit" in order to re-establish a good strong credit history once again after a bankruptcy. This is a time tested and proven way to improve your credit scores, especially when you have a low fico score and a bankruptcy as well. When you piggyback off of someone else's credit you are actually borrowing their credit history and it is being added to your credit report as though it is yours. You simply need to find a family member or friend with strong credit and have them add you onto an established credit card of theirs that is not maxed out and has a good payment history as an authorized user (not a co-borrower). Many credit card companies will then report the account to your credit report as well, thus boosting and improving your credit scores.
Mortgage brokers are the only source when it comes to getting a mortgage after a bankruptcy. Mortgage brokers are able to sell sub prime loans to borrowers and many of the sub prime borrowers have bankruptcy mortgage programs. Many of these programs have tightened up recently so do not expect to get 100% financing one day out of chapter 7, 80-90% financing is what most bankruptcy mortgage programs offer today.
If you have enough equity in your home, you may be eligible for a Chapter 13 Bankruptcy Buyout. A Chapter 13 Bankruptcy Buyout has the potential to save you hundreds and hundreds of dollars each month by paying off your trustee with the equity in your home.
Getting a mortgage when you have a low fico is easier if you take steps to improve your credit score. You should dispute and inaccuracies on your credit report, pay down your credit balances and make your payments on time to improve your credit score.
Many times, if you have a strong income and some assets, you may still qualify for a Fannie Mae Expanded Approval or an FHA Loan. You will need to have your bankruptcy discharged for at least 2 years and a strong recent mortgage history.
One of the most important things you will need is equity. Equity is the difference between what you owe on your home and your home's current market value. Take a look at similar properties in your area that are listed for sale or have sold recently to get an idea of the current market value of your home.
