Refinancing After You've had a Bankruptcy.

After going through a bankruptcy refinancing may seem like a difficult challenge but it doesn’t have to be. Six months from your bankruptcy being finalized you can find lenders willing to refinance your mortgage.  Be sure to work with  a respectable lender who will not take advantage of the fact you've had a bankrutpcy. Refinancing your mortgage can help re establish your credit within 18 months to two years. 

Prepare For Refinancing

Following your bankruptcy, you have six months to prepare to refinance your mortgage. Begin by establishing good payment history. Make prompt and and on time paymetns on your bills and current mortgage. This is a  good time to open a credit card account to start re-establishing good credit history. Do not open  multiple accounts. One account will be enough to help establish credit worthiness.

Examine your finances. If you are capable of starting or continuing a savings account this will help to improve your credit worthiness to the lender. The more cash assets you have, the better your application will look. But if you don't have savings or investments, do not let this deter you from refinancing.

Choosing a lender.

When choosing a lender do a little a referral from family or friend along with your own research can help you with the selection. Research mortgage lenders and their rates. Ask questions about program for homeowners previously in bankruptcy. Online mortgage websites allow easy comparison shopping. Look at both interest rates and fees of refinancing quotes. With bankruptcy on your credit report, you will typically expect to pay a few percentage points above a traditional mortgage. 

Selecting a refinance package. 

You will be presented with some options during the refinance process. You have the option of refinancing to cash out or the option of a rate and term refinance. If you need to make home improvements, consolidate debt, plan for college tuition- a cash out is a good option. However, if you keep your home’s equity in place, you're improving your credit.

Refinance is Complete

Once you have completed the refinance - continue with you plan of restablishing your credit. You can plan to lower your interest rates through refinancing in two years by building up your credit score. Make regular on time mortgage payments.  As your credit improves you will receive unsolicited offers for extension of credit. Be careful about assuming new debt. The goal is to lower your mortgage payments over time. Before you apply to refinance again you want to review your credit report . Verify the bankruptcy closed all past accounts on your record. Once you have establsihed a strong credit history,  you're prepared to apply for a more traditional mortgage. Your bankruptcy will be a thing of the past. Your new credit history will place you in the postion of financial  strength. It will allow you to obtain the best mortgage rates available to homeowners with good credit.