How To Refinance A Mortgage After A Bankruptcy

How to refinance a mortgage after a bankruptcy is an issue facing many borrowers. It will be easier to refinance your loan if you have been able to start rebuilding your credit. This shows your lender that you have a willingness to repay your obligations. If you have a sizeable amount of equity built up in your home, this will also make it simpler to refinance a mortgage after a bankruptcy.

1. Rebuild your credit by establishing a credit line and paying it on time. One way to get credit after a bankruptcy is to open a savings account at a local bank. Tell your banker you want a line of credit that is secured by the savings account. This way if you do not make the payments, the lender has no risk because the savings account cannot be closed until the loan is paid off. They will lend you a certain amount of the savings account, based on their loan guidelines.
2. Once you have begun to rebuild your credit, contact your existing mortgage lender. Tell your lender that you want to refinance a mortgage after a bankruptcy and ask them what their current interest rates are. If they are unwilling to work with you or they do not have a rate that is to your liking, contact a different lender.
3. There are many lenders you can find online who will give you a mortgage after a bankruptcy. The biggest issue is the rate they will charge you for the refinancing a mortgage after a bankruptcy, as well as the associated costs involved to process the loan. If you find a lender with an interest rate you think is reasonable, make sure that you have done some research on the lender before applying. If all is in order, go through the lender’s application process.
4. If you receive an approval on your refinance request, make sure the terms of repayment are affordable. Ask your lender if they will give you a discount on your loan if you have your monthly mortgage payments automatically taken from your bank account. Since you are getting a mortgage after a bankruptcy, you do not want to have any issues with the repayment that could effect your efforts to repair your damaged credit rating.