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At one point in time, getting a mortgage immediately following a bankruptcy was hopeless. Today, more and more lenders are eager to extend credit and approve a bad credit home loan. Before applying for a mortgage, it’s important to ask yourself three critical questions. Although attaining a mortgage after bankruptcy is doable, borrowers must meet certain requirements.

Here are three questions to ask about mortgages after bankruptcy.

1. Are my mortgage lender options limited?
Unfortunately, individuals who apply for a mortgage loan after bankruptcy have a limited choice of home loan lenders. A great number of lenders prefer candidates with A or B credit. There is a lower default rate with prime applicants, and lenders feel at ease. Nevertheless, several lenders have started offering sub prime or high risks home loans. Borrowers will pay a higher rate. However, a sub prime loan is the only way to get a mortgage after bankruptcy, and it allows for a fresh start and the opportunity to rebuild credit.

2. What are the mortgage loan requirements?
Borrowers who’ve filed bankruptcy will be required to provide additional documents and endure careful scrutiny. Before approving the loan application, the mortgage lender will ensure your ability to repay. They’ll likely request detail explanations such as, why did you file bankruptcy? What’s more, the lenders will also ask for copies of the discharge paperwork. Next, borrowers must provide information about their current financial standing (income, debts, assets, etc.) If the application is satisfactory, the lender will approve the home loan.

3. Will I be able to refinance the mortgage in the future?
Yes. Since the majority of home loans that follow a bankruptcy involve high rates, many borrowers make plans to refinance and attain a lower rate once their credit improves. If you submit regular mortgage payments for at least two years, and take additional steps to improve your overall credit score, getting approved for a mortgage refinance or new home loan will be less difficult.