How to Refinance a Home After Bankruptcy in Missouri
Refinancing a home is one way to reduce monthly mortgage payments. Unfortunately, it is harder to find a bank willing to approve a request to refinance after filing for bankruptcy. Lenders who work with homeowners that have a recently discharged bankruptcy often charge higher interest rates. However, Missouri anti-predatory lending laws limit the amount of interest a lender can charge, but the laws also require lenders to thoroughly screen borrowers.
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Instructions
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Wait for your credit to improve. Give your credit at least six months to recover from the bankruptcy. It will take at least 60 days for debts that are part of a discharged bankruptcy to appear as closed accounts with no balance due. Check your credit report and contact the credit bureaus if items that were part of your bankruptcy have balances due or are listed as charged-off accounts.
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Establish one new line of credit. Part of proving credit worthiness is showing your ability to repay creditors on time. Be willing to apply for accounts with subprime or prepaid credit card companies. The interest rates are usually higher, but it is important to show that you can make timely payments after bankruptcy.
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Contact a mortgage broker who has experience working with borrowers with recent bankruptcies. Borrowers with less than perfect credit have a harder time finding lenders even after the borrower has rebuilt their credit. A mortgage broker will have contacts with banks willing to review higher-risk refinancing applications.
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Gather your order of discharge, pay stubs and bank statements. Lenders need proof that the bankruptcy was successfully discharged. The lender will also need to verify that the borrower is able to repay the loan amount. Having money saved will show lenders how serious you are about rebuilding your finances after a bankruptcy.
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