What to Expect with Refinancing After Bankruptcy

There are any number of reasons you may have filed bankruptcy. The point is, it’s made an impact on your credit rating and you’re going to be dealing with the issues following bankruptcy for several years. What happens now if you need to refinance your home loan? There’s little doubt that you’re going to feel the effects. Take a few minutes to consider some facts about refinancing home loans after bankruptcy.

Start by evaluating the reason you’re looking for a refinance loan. If possible, it may be a good idea to put it off for a few years while you work on rebuilding your credit. But there are some cases that simply require refinancing now. If you have a loan with a balloon payment, you probably have little option about the possibility of refinancing. Obviously, saving enough money to pay off the loan is a good way to avoid the entire scene – though it’s seldom going to be a possibility. Otherwise, you just have to make the best of the situation.

Start by talking to your lender about refinance options. If you’ve made your payments on time every time or have at least made arrangements whenever you had trouble with payments, you may be pleasantly surprised at how willing your existing lender is to work with you. Even if you’ve had some problems with payments, you may find more cooperation with a lender who knows you.

Don’t limit yourself to working only with your existing lender. The Internet has made shopping for many services – including mortgages and refinancing loans – a snap. You’re not limited to the companies with offices in your neighborhood. You have more options than ever before when it comes to finding lenders. A step as simple as filing out an online loan application can garner some offers you never thought you’d qualify for.

Remember that some lenders specialize in working with people who have had credit problems, including bankruptcy. You may find those lenders more willing to work with you and better able to offer acceptable terms.

Look carefully at your repayment needs. Though refinancing may be important, it’s not going to do you any good to agree to terms that you can’t meet. If you can’t make the payments on time or meet other conditions of the refinance loan, you’ve really only succeeded in compounding your problems.

Refinancing is often a good idea, even if you have a bankruptcy on your credit report. You can often get better terms, lower payments and/or a shorter payoff time by refinancing.