Mortgage Refinancing After Bankruptcy – Not As Painful As You Might Think

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Mortgage Refinancing After Bankruptcy – Not As Painful As You Might Think

Sunday, January 13th, 2008 Subscribe To Our Feed

You may think that there is little chance of getting any form of mortgage refinancing after bankruptcy but surprisingly this is not the case. Within around 6 months of the bankruptcy process completing you will find that many banks and institutions will be willing to offer you some form of loan refinancing, despite the fact that you may have a low credit rating. This is good news, not just because you will be able to raise some cash but it will help to rebuild your credit rating so that you can get better deals in the future. This article will cover the way to get such a deal.

Must Have A Good History Of Repayments

To begin with you need to get your financial house in order as quickly as possible. Then keep it that way for the first six months after the bankruptcy process has completed. Simple hey ?

Well, this involves keeping your mortgage repayments current. At the end of the six months, for that period, you should have a spotless mortgage repayment history.

Another idea is to take out a credit card. You may not get the best interest rates or annual fees with such a card but you can use it to raise your credit score over the six months. This means paying it off every month and probably not really using it excessively.

You should also have a stable bank account that has a small amount of savings in it.

All these things will look good on any application for mortgage refinancing after bankruptcy.

After Six Months

Although you can do your research before six months, you will be making an application after this period and products change or new products are released so do your research around the time you are about to apply.

When considering mortgage refinancing after bankruptcy you need to establish who are the best mortgage lenders. This means what their interest rates are likely to be. This is fairly easy to do on the internet by doing some comparison shopping. You must also factor in their fees and any penalty clause should you decide to get out of the mortgage. What’s more, you will probably need to deal with sub prime lenders which could mean you may pay a bit more for your mortgage. Given the ongoing sub prime lending problems this means rates may be higher and more scrutiny of your financial state.

It is prudent to get quotes from mortgage lenders and making online applications also makes sense as it effectively pre-qualifies you for the mortgage. This could speed up the application process if you decide to go with this lender.

A mortgage refinance after bankruptcy can help to consolidate any debt that you may be paying off. It can also make your life a bit easier after a recent period that has probably been punctuated by episodes of uncertainty and stress. You may even be able to have a break with some of the money you get from the refinance if you think this will help you in the long run. However it is important to use the money prudently because you cannot file chapter 7 bankruptcy for another 7 years.

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