How to Refinance Your Home Loan After Bankruptcy
If you have experienced bankruptcy, it may be difficult to qualify for refinancing your home loan. However, with some sound financial planning and preparation, plus an understanding of the regulations governing mortgage refinancing, it is possible to refinance your home loan and get the fresh start you need.
Step 1: Consult with a Financial Professional
When it comes to filing bankruptcy and seeking to refinance your home loan after bankruptcy, the best place to start is by consulting with a financial professional. Financial professionals such as a Licensed Financial Adviser or a Licensed Attorney that specialize in bankruptcy law can provide you with guidance and advice on the whole process. They can discuss your situation and determine the best course of action and provide access to resources to help you through the process.
Step 2: Improve Your Credit Score
Bankruptcy is a major hit to your credit score, so it is important that you take steps to repair your credit score before applying for refinancing. Pay your bills on time, reduce your debt as much as you can and check your credit report for errors. Also, consider taking out a secured credit card to rebuild your credit. This can help you demonstrate that you’re committed to improving your credit score.
Step 3: Consider a Government-Backed Mortgage Program
Consider applying for one of the government-backed programs available, such as the Home Affordable Refinance Program (HARP). This government-sponsored program is designed to help borrowers refinance their home loans even if they owe more than the current value of their home.
Step 4: Be Persistent and Patient
Refinancing can be a lengthy and difficult process after bankruptcy, so it is important to remain persistent and patient. Make sure to be in contact with your lender throughout the process and follow up at least weekly in order to ensure the process is moving along. The process of refinancing a home loan after bankruptcy can take up to eight weeks or longer.
Step 5: Prepare for Closing Costs
When refinancing your home loan after bankruptcy, it is important to be prepared for closing costs. It is likely that you will have to pay points, fees and other charges associated with the refinancing process. The amount will vary from lender to lender, so it is important to compare lenders and their fees before committing to the loan.
Refinancing your home loan after bankruptcy is possible with some planning and preparation. Remember to consult with a financial professional, work to improve your credit score, consider a government-backed mortgage program, be persistent and patient during the process and prepare for closing costs.
