How to Get Refinancing for a Home After Bankruptcy
Getting a mortgage refinance is quick and easy if you have a good credit score and meet the lender's requirements. But if you have a low credit score, or worse, a bankruptcy in your past, qualifying for a refinance can prove challenging. But despite the challenges, you can get a refinance after a home bankruptcy. A refinance can change the terms of your current home loan and help you get a lower payment.
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Instructions
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Spend the next 24 months improving your credit score. Acquire a bad-credit credit card immediately after a bankruptcy to start fixing your low credit score. Pay this account on time each month, and avoid accumulating excessive debt by keeping balances below 30 percent of your credit limit.
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Grow your personal savings. Refinancing a mortgage loan requires out-of-pocket cash for closing fees, application fees and appraisal. Spend less, and start depositing your extra cash into a savings account to begin preparing for fees related to a mortgage refinance.
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Determine a purpose for the mortgage refinance. What do you hope to accomplish by refinancing your home loan? Having a clear objective in mind can help your broker or lender determine the best home loan program for you. Good reasons to refinance include lowering your existing interest rate, acquiring a fixed-rate loan or reducing monthly payments.
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Keep good financial records. Show your lender or broker copies of tax statements or W-2's. Lenders need this information to establish whether you meet the qualification for a mortgage refinance. Getting a refinance involves re-qualifying for a home loan.
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Discuss FHA loans with your broker. People who file bankruptcy can qualify for an FHA refinance two years after a bankruptcy with a credit score as low as 620.
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