If you’re unfortunate enough to have to declare bankruptcy, it can lead to many things, not least losing your home to your bank. If you’re lucky enough to keep your home, however, then a mortgage-refinancing loan can help you get back on your feet.
With more lenders less likely to take your home from you during this time, since it costs them more in legal costs than it would in working out a payment plan with you, a mortgage refinancing loan is a much more likely option for you. The good news is that you can start to prepare for refinancing your mortgage immediately, and once you start this process, it can help get you back on your feet within 2 years.
The First Steps
If you’ve declared yourself bankrupt, and you’re fortunate enough to keep your home as part of any agreement with your creditors, the first thing you need to do is start re-establishing your credit, so you can apply for a mortgage refinancing loan. Since mortgage lenders will only allow you six months, however, you need to start immediately.
Some good methods to help you remortgage your home are to make sure you pay off your existing bills and mortgage payments. After all, you’re unlikely to be accepted for a mortgage-refinancing loan if you don’t even make an effort to get back on your feet from your current predicament.
A savings account is also a good way forward, since this shows that you can be responsible with money. A second job that brings in extra funds will also go a long way to help you get that refinancing loan that will make all the difference.
Choose The Right Lender
Since you have probably already defaulted through your existing mortgage lender, as well as other finance companies, it’s going to be highly unlikely that they will offer you a mortgage-refinancing loan should you apply for one. After all, you’ve already proven to them you have the potential to default again.
Therefore, you will probably have to look at a different type of lender called a sub-prime lender. These are companies that will offer finance and mortgage refinancing loans, even to those with bad debt. The problem with these companies is that the interest rates are usually higher. However, if you can find a lender with a higher interest rate but a lower fee involved, it’s a better option. You can find the lender that’s best for you by doing a little research online.
Stick To Your Payments
Although it can be difficult to get a mortgage-refinancing loan after bankruptcy, it’s not impossible. One thing you do need to make sure of, though, is to see your options through. If you do take out a refinancing loan once you’re applicable, stick to the payment plan.
Not only will this help you increase your credit score again, allowing you to use more traditional lenders in the future, it will also help stop you having to remortgage your home again, which can add to the length of your mortgage considerably
