Refinance After Bankruptcy How Does Your Bankruptcy Affect Home Mortgage Refinancing


Refinance After Bankruptcy How Does Your Bankruptcy Affect Home
Mortgage Refinancing 1

Refinance After Bankruptcy - How Does Your Bankruptcy Affect Home Mortgage Refinancing?
There are a​ few basic concepts one should know when looking into refinancing a​ mortgage after a​ bankruptcy .​
Most importantly,​ you​ need to​ know the​ two different types of​ personal bankruptcy that you​ can declare.
Chapter 7 Bankruptcy,​ often called straight bankruptcy,​ is​ an​ attempt for someone financially overextended to​ liquidate most of​ their assets to​ satisfy creditors,​ keeping only a​ few personal assets needed for the​ basic necessities of​ life such as​ an​ economical car,​ personal clothing,​ etc.
In Chapter 13 Bankruptcy,​ your assets are not liquidated .​
Instead,​ you​ come to​ an​ agreement with an​ appointed trustee where late charges and other penalties are eliminated and you​ start a​ payment plan to​ repay much of​ the​ debt owed .​
This process can take over a​ year or​ two,​ but will allow you​ to​ retain belongings (and property) .​
Also,​ it​ is​ looked at​ more favorably by lenders because you​ are attempting to​ repay your debts,​ not just write them off .​
Lenders will look at​ both the​ date the​ bankruptcy was filed and when it​ was discharged.
A Chapter 13 Bankruptcy buyout is​ a​ refinance loan,​ taking out a​ new loan to​ cover the​ existing mortgage and some or​ all of​ the​ other debts .​
This is​ basically considered a​ cash-out refinance .​
Most Chapter 13 Bankruptcy refinance loans are limited to​ roughly 85% of​ the​ value of​ your home.
When refinancing out of​ a​ Chapter 13 Bankruptcy,​ or​ soon after a​ Chapter 7 or​ Chapter 13 Bankruptcy,​ you​ will almost certainly be working with a​ sub-prime or​ non-prime lender .​
These lenders specialize in​ helping borrowers with blemished credit histories .​
Often,​ borrowers refinancing near the​ time of​ a​ bankruptcy will seek the​ assistance of​ a​ mortgage broker,​ many of​ whom have experience with this type of​ loan .​
If possible,​ it​ is​ best to​ wait at​ least two years after the​ discharge of​ your bankrupty to​ refinance your mortgage .​
This will help you​ to​ receive a​ better interest rate .​
Start now to​ pay your bills on​ time and in​ full .​
This will help to​ repair your credit and give you​ even better chances of​ a​ lower rate.



Refinance After Bankruptcy How Does Your Bankruptcy Affect Home Mortgage Refinancing



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