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.