How to Refinance Mortgage After Bankruptcy

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If you have recently declared bankruptcy, you may not realize that you are still able to refinance your mortgage. Even if you have bad credit, certain lenders can step in and help, even if they can't provide the best terms available. By replacing your current home loan with a completely new mortgage, you can get a lower interest rate, save money, and start rebuilding your credit.

  • Establish good credit. Despite having recently declared bankruptcy, you can start anewt. Focus on saving money on an everyday basis and paying your bills on time. If you don't have a credit card account, open one to help establish a good credit history. Be sure to pay off your balance and make all payments on time. Open a savings account and put money away each month. In addition to paying your regular bills and current mortgage on time, you must make your bankruptcy payments on time. This will be a large factor contributing to whether a lender will agree to refinance your mortgage. Whether you have trustee payments, loan payments, or others, make sure everything is made on time.

  • Talk to your bankruptcy attorney. Get advice from your bankruptcy attorney about whether you need to wait a certain amount of time before refinancing. This will depend on the type of bankruptcy you filed, the type of mortgage you currently have, and your lender.

  • Do your research and obtain quotes specific to your situation. Spend some time researching mortgage lenders and their rates. Look particularly at lenders who specialize in refinancing after bankruptcy, such as subprime lenders. For a useful list of mortgage lenders who cater to those with bad credit, visit abcloanguide. or mortgagecreditproblems (see Resources for link). If you have trouble finding a lender for your refinance, a mortgage broker may help you shop around to find the best refinancing deal.

  • Decide on the most favorable terms. You may be able to get a better rate depending on the length of the mortgage or the type of mortgage you accept (interest only, fixed rate, adjustable rate). Ask your lenders what kind of mortgage would be the most favorable to you.

  • Apply online and close the loan. After deciding upon which lender to go with and the type of mortgage that will best fit your needs, complete your application online. You will want to act fast so you can take advantage of the interest rate that you have been offered. If you wait too long, the interest rates may get higher. Set a date for closing that allows you enough time to get any last details taken care of, but still allows you to close the loan promptly.

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