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How to Refinance a Mortgage Despite Bankruptcy

How to Refinance a Mortgage Despite Bankruptcy
"""If you have previously filed for bankruptcy, you are already aware of how difficult it is to obtain a refinance loan or a home equity loan. However, if you are willing to take the time to delve a little deeper into the topic, you may be pleasantly surprised by the number of viable and even enticing options and offers. The fact that you have a bankruptcy on your credit report or an extant or previous debt consolidation loan does not appear to deter many lenders from alternative sources in the same way it may deter traditional lenders.

Many of these lenders are eager to provide you with an attractive program or interest rate for a home equity loan or refinance loan. The reason for this is that they have examined the bankruptcy statistics and realized that the majority of people who filed for bankruptcy did not do so due to their own financial mismanagement, but rather due to an unexpected financial setback that was completely out of their control, such as a job layoff or unexpectedly high medical bills that were not covered by health insurance.

Even if you filed for Chapter 7 or Chapter 13 bankruptcy less than six months ago, you may be ineligible for all the programs a potential lender has to offer if you have recently emerged from bankruptcy.

Whether or not you have filed for bankruptcy, you must be aware that you can typically keep your property, as it is not typically one of the assets that must be sold to satisfy a bankruptcy judgment. As a result, you almost undoubtedly have equity in your home, so lenders will view it as a loan with substantial collateral in the form of your house. In other words, when a lender makes a loan offer, their risk factor is one of the primary determinants of the program or interest rate they will offer you. This risk factor is partially determined by the applicant's credit score, but it is also significantly influenced by the collateral used to secure the loan; therefore, the lender's risk is minimal if your home equity loan or refinance loan is secured by your home.

Even if the loan is secured by your property, the lender will notice that you have filed for bankruptcy. The worst thing you could do is attempt to conceal the fact, as it is highlighted in your credit report and nearly impossible to conceal. Depending on your filing, you may be required to pay a slightly higher interest rate than someone with perfect credit and no bankruptcy on their credit report, but this could still reduce your payments and give you some financial breathing room while you get your financial act together.

It is not difficult to find a lender willing to consider you with a bankruptcy on your credit report, but you will need to search beyond traditional lenders. There are companies that specialize in these types of loans. As you work to rebuild your stellar credit history and place your bankruptcy in the rearview mirror, a bit of research can lead you to the ideal lender.

" - https://www.affordablecebu.com/

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"How to Refinance a Mortgage Despite Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 107 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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