Refinancing
After Bankruptcy
Refinancing after a bankruptcy can seem like an especially difficult challenge,
but it doesn't have to be.
See below for the Most Reputable Lenders:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
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.
Here are our recommended
sources for sub prime or bad credit mortgage lenders online:
See below for the Most Reputable Lenders:
-(updated )-
When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
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