Refinancing your home mortgage following a bankruptcy may put extra cash in your pocket to help finance large home improvement projects and lower your monthly mortgage payments. On the other hand, the bankruptcy may ruin any chances of securing a low rate. In this instance, a refinancing would be pointless. Before refinancing, contact several refi lenders and learn about your options.
Practical Reasons to Refinance a Mortgage Loan
Mortgage refinancing serves many purposes. The primary basis for refinancing involves low mortgage interest rates. Thus, homeowners who obtained a mortgage with a rate above 8 percent can refinance for rates around 5 or 6 percent and enjoy the savings.
The goal of refinancing is to free up money. The monthly savings could go toward investing, saving, etc. Moreover, some homeowners choose to increase the total cost of their home by obtaining a cash-out refinancing. This method entails borrowing money from your home's equity. This is ideal for debt consolidation, home improvement projects, etc.
Improve Credit Score Before Refinancing
If refinancing immediately following a bankruptcy, the chances of getting a low rate are slim. Thus, it may be a wise choice to improve credit before applying for a new mortgage loan.
Prior to refinancing, obtain a copy of your credit report and score. Strive to increase your credit score within the next six months to one year. To do this, you will need to establish new lines of credit. These could be a secured credit card, store charge account, gas card, etc. Attempt to open three new credit accounts. Do not accumulate a lot debt. If possible, pay off the credit cards each month.
Use the Internet to Find and Compare Refi Lenders
Several lenders offer refi loan packages to individuals with past bankruptcies. Sub prime lenders and bad credit mortgage lenders have a range of loans available. To begin your search, complete an online quote request with a mortgage broker. Brokers are the easiest way to gain access to sub prime lenders because they have access to many loans and lenders. After weeding through a large selection of lenders, brokers will remit quotes from four different refi lenders eager to have your business.
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Frequently Asked Questions
How long until a house goes into foreclosure?
By: shelly1066 | 23-08-2008
We are filing for bankruptcy in november and our attorney told us to stop paying our mortgage as of august 1st and let it go into foreclosure. I'm very nervous about this and wondering how long until the house goes into foreclosure and how long will we have to stay.
Bankruptcy? Should I?
By: cindyclaaa | 23-08-2008
I am in debt about 25,000.00. I am thinking of filling for bankruptcy however I need to get more information on how that works. I am a single mom of two. I make about 35,000. annually. I rent an apartment for 1300. monthly. Need help
My husband passed away . leaving me with one ...
By: sandy | 22-08-2008
my husband passed away . leaving me with one income can i file bankrupycy and keep my house is there such a thing as hardship
Chapter 13 bankruptcy removal?
By: judy | 22-08-2008
If you have a chapter 13 bankruptcy on your credit report that was dismissed can you get it removed off the report
Civil Law Suit and Bankruptcy
By: colq123 | 22-08-2008
I was building 2 house in FL, I am in GA. the customers wanted CO, upgrades, but were un-willing to pay for them. I stopped building, obtained a construction lien for in excess of $100,000.00 on both houses, I was unaware that after 1 year, the lien terminated in FL. after the lien expired the customers obtained an attorney, suited me in Civil court, I counter, etc. any way I just recently had to file Chapter 7, naming the customers, attorneys, etc as creditors in the Bankruptcy what can they pursue, do upon the discharge of the bankruptyc.
If I got someone to sign a surety bond for the ...
By: Tradman75 | 21-08-2008
If I got someone to sign a surety bond for the purchase of a car and I went into 13 or 7 how is that person affected; will they take the car, will they come after the signer or will they re-finance the car with me alone? thanks!
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