Refinancing your mortgage after bankruptcy is indeed often a good step on the road to rebuilding your credit standing, some people have even achieved this in as little as 24 months. In most cases this really doesn’t have to be all that difficult as long as you’re disciplined and follow the right steps.

A Good History Of Repayments

This is essential, in order to go down the refinance mortgage after bankruptcy road one must have everything ready for ones mortgage within six months of their declaration of bankruptcy and during this time it will be essential that they can prove they have a good history of paying their bills regularly on time.

In some cases it may help having a credit card as used responsibly it could help to establish a good history of credit, although as a word of warning the extra fees often associated with late payments etc can also cause you more problems, see our Best Credit Card After Bankruptcy article for more details. Additionally it could help you to have a stable savings account.

Finding the best mortgage lender

Naturally you are going to have to do some research and check out all of your available lenders. You must be farer when comparing different lenders and make sure you take into account all of the small print associated with each offer.

You will need to decide whether to use your home equity to refinance your mortgage or whether to raise funds via other methods. You need to understand that when it comes to refinancing a mortgage after bankruptcy you are more or less taking out a completely new mortgage so your objective will be to obtain lower rates and save more money over the lifetime of the mortgage.

You must tread carefully along the road ahead, sadly like everything financial there are scammers and the like that prey on people who take the refinance mortgage after bankruptcy option. Nevertheless as long as you do your research and check out the lender you go with thoroughly there is no reason why you cannot achieve a positive result.

It is definitely not a walk in the park to obtain a home mortgage after bankruptcy or any other type of mortgage/loan for that matter. However impossible it is not either, many companies will still take you on even with a bad credit history after bankruptcy. Many of these companies will however not allow you to get a loan with them until a specific amount of time has passed since the discharge of your bankruptcy. Many of the companies that offer this are often referred to as second chance lenders.

Non-traditional lenders are generally more willing to provide a mortgage loan after bankruptcy with a somewhat higher interest rate, this obviously greatly increases the amount of the loan over its lifetime. There are some lenders that will grant a loan for a new house within a couple of months from the discharge date of the bankruptcy, whereas others prefer the individual to start rebuilding their credit standing for a little while longer before they start taking on any additional debt.

A number of reasons why a lender would be willing to grant a home mortgage after bankruptcy (or other types of mortgage for that matter) exist, including the fact the person cannot file for bankruptcy for another seven years and if they are going to default on the mortgage, there is a pretty good probability it will be within the first few years.

The Mandatory Counseling Also Plays Into the Decision

The reasons for claiming bankruptcy will vary from one individual to the next and so these can also help a lender decide if a person can be trusted with a mortgage after their bankruptcy. On top of this, anyone who filed for bankruptcy after the year 2005 will have had to go through two separate financial counseling sessions. The first session, before filing, is to find out if the person qualifies for bankruptcy under the Chapter 7 or 13. Additionally after the court hearing and a little before the discharge they are obligated to undergo financial management counseling to learn to be more responsible with their money.

You must be careful though as there does exist some less than honest people out there that try to take advantage of people searching for a mortgage loan after bankruptcy. These individuals often offer these loans to people who simply should not really take them on, in these cases the lender is hoping that the individual will end up having to default on their loans and in doing so open the door to the lender having the power to get a judgment against the individual and on top of that take their wages for repayment and even take their home away from them! Needless to say this would only mess things up even more for the individual.

However there are many people who do go through with bankruptcy and find that things like after bankruptcy bad credit personal loan access is not denied to them from then after. There are quite a number of what we would call non-traditional lenders these days who have found that in many cases people who have gone through bankruptcy are a little more dedicated with their obligations, since they realize that they will not be able to get relief on their debts for some years to come.

Following bankruptcy bad credit personal loan rates are typically at the high end of the interest rate spectrum and they are also accompanied by initial charges that are considerably higher than a personal loan for someone with an unblemished credit rating. What many people do not realize is that Personal loans with no collateral are actually dischargeable under even the new bankruptcy laws and also cannot be defaulted upon as the lender granting a post-bankruptcy bad credit personal loan has the court on their side in the obtaining of the repayment.

After a bankruptcy discharge a person cannot file to be protected for another seven years and the lender can then make use of the courts in order to receive an order of default. With this order in hand, the lender can use wage garnishment to recover the amount loaned. After bankruptcy bad credit personal loan granters end up having more chance of getting their money back than grunters who work with people before bankruptcy.

How the stigma of bankruptcy has changed

It has always been true in the past that someone who filed for bankruptcy would require years of waiting before the notice of their bankruptcy faded from their credit history. However now that society is getting used to hearing about more people filing for bankruptcy it is becoming more normal for people and so the stigma has somewhat faded. The fact that more and more lenders are willing to lend money to these people has also helped in this way.

The truth is that even with the new bankruptcy laws of today the number of filings for bankruptcy at the courts is still greater than it was before. Obviously if you can avoid bankruptcy you would be best to do so, but now that bankruptcy bad credit personal loans are available is not such a bad option as it once was and indeed in some cases can be a good option.

It is important to note however that bankruptcy bad credit personal loan interest rates are normally pretty high, in some cases even hitting the maximum allowed by the state. There are some lenders with some more reasonable rates but they can be hard to find. The bottom line is anyone who seeks a bad credit personal loan after bankruptcy must tread very carefully to make sure it doesn’t end up putting them in a worse situation.