Refinancing After Bankruptcy
Refinancing after a bankruptcy can seem like an especially difficult challenge, but it doesn't have to be. Six months after your bankruptcy has been finalized, you can find lenders willing to refinance your mortgage. In fact, refinancing your mortgage can help rebuild your credit to good standing in two year's time. The following steps will help you find the best refinance lender while helping your rebuild your credit record.
Preparing For Refinancing
Right after bankruptcy, you have six months to prepare to refinance your mortgage. Begin by establishing good payment history by regularly paying your bills and current mortgage. This is also a good time to open a credit card account to start establishing good credit history.
If possible, also start building up a savings account. The more cash assets you have, the better your application will look. Consider having a garage sale or taking a second job to raise funds.
Researching Lenders
Once you are ready to refinance, research mortgage lenders and their rates. Online mortgage websites allow easy comparison shopping. Look at both interest rates and fees of refinancing quotes. Usually a slightly higher rate with low fees is the best deal.
With bankruptcy on your credit report, you will typically need to work with a sub prime lender. You can expect to pay a few percentage points above a traditional mortgage, which you can find through online mortgage companies.
Choosing Your Refinancing Package
You may be offered a chance to cash out part of your home's equity when refinancing your mortgage. If you need to make home improvements or buy a car, this may be a good option. However, if you keep your home's equity in place, you are improving your credit.
Once you have decided on your terms, you can finish your loan application online or through the mail. Quotes are not guaranteed, so rates may vary slightly once your application has been approved. Before the loan is finalized though you have the opportunity to review the loan again.
After Refinancing
With your refinancing completed, you can plan to lower your interest rates through refinancing in two years by building up your credit score. Continue to make regular payments and add to your cash reserves. Before you apply to refinance again, review your credit report to be sure your bankruptcy closed all past accounts on your record. With a solid credit history behind you, you can apply to traditional mortgage lenders.
To view our recommended sources for refinancing after a bankruptcy online, visit this page: Recommended Bad Credit Mortgage Lenders Online.
Carrie Reeder is the owner ABC Loan Guide, an informational website about various types of loans.
Latest News
Wolters Kluwer Financial Services Begins Development of Hope for ... MarketWatch - For borrowers who refinance under H4H, lenders are required to "write down" the mortgage to the Department of Housing and Urban Development (HUD)-provided ... |
Looking to refinance? Now might be the time Boston Globe, United States - Mortgage rates have been stubbornly high for quite some time but the government's recently announced $800B plan to bolster mortgages and consumer loans had ... |
Good time to refinance your mortgage? WKTV, NY - By GARY LIBERATORE (WKTV) - If you are in the market to buy a home, it's a really good time, but if you're selling, it's not so good. ... |
Bellingham man's adjustable mortgage became money trap Bellingham Herald, WA - Caceres said he got his first adjustable mortgage seven years ago and managed to refinance it twice since then, to get out from under the higher interest ... |
 Straits Times | Mortgage rates fall, but many borrowers will have trouble qualifying Los Angeles Times, CA - Jeff Lazerson, a Laguna Niguel mortgage broker, said all the customer calls he received Tuesday were from people seeking to refinance, not buy homes. ... Mortgage-market revival: Try, try again Last Call for Smart Homeowners US move cuts mortgages to lowest rate since February |
See if lender will let you pay insurance, taxes San Francisco Chronicle, USA - I almost feel like the mortgage companies are just trying to get extra money from us by having us refinance soon. Even in this economy, this house would ... |
 The Star-Ledger - NJ.com | General Growth Properties gets loan reprieve The Associated Press - General Growth Properties said last month it faced solvency trouble and might seek bankruptcy if it couldn't refinance or extend the nearly $1 billion in ... General Growth secures two-week loan extension Creditors give Buckland mall owner a two-week debt reprieve UPDATE 1-General Growth gets two-week loan extension |
Commercial loan "nightmare" projected for 2009-JPMorgan Reuters - He said the slowing economy that is wreaking havoc on cash flow expectations may also present mortgage companies with a dilemma as borrowers confront them ... |
Avoiding your own mortgage collapse The News Journal, DE - By ANDREW EDER • The News Journal • December 1, 2008 It used to be that homeowners struggling to meet their mortgage payments had two options -- refinance ... |
US Consumer Loan Aid Will Trickle Only So Far New York Times, United States - By RON LIEBER and TARA SIEGEL BERNARD If you’re buying a home, refinancing a mortgage or seeking an auto or student loan, the new government plans to make ... US MBA’s Mortgage Applications Index Rose 1.5% Last Week Mortgage rate drop sparks surge in consumer interest Paying for home just got cheaper |
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