The answer is “YES!” You can refinance your home after bankruptcy and sometimes even during your plan. In this post we’ll be discussing those qualifying stipulations that you will need to meet in order to refinance your home during or after your bankruptcy. We hope you’ll enjoy this post and learn all about the processes of how to refinance your home after bankruptcy.
When Can I Refinance My House After Bankruptcy?
There are typically two forms of bankruptcy which will affect individuals most often. These two forms of bankruptcy consist of Chapter 7 and Chapter 13 Bankruptcy. Below is a breakdown of the differences and similarities between Chapter 7 Bankruptcy refinancing and Chapter 13 Bankruptcy refinancing:
Chapter 7 Bankruptcy Refinancing Waiting Period:
You must wait for a period of two years, post-discharge, to properly qualify for a government-backed residential mortgage refinancing. The waiting period for a conventional home loan (commonly conforming to loan limits set forth by Fannie Mae and Freddie Mac) can be as long as four years. However, some lenders have conventional loan programs that require less of a waiting period. Remember this shorter waiting period is entirely dependent on the qualifying criteria of the borrower.
Chapter 13 Bankruptcy Refinancing Waiting Period:
You could be eligible for refinancing as soon as one day after the discharge of your from your bankruptcy plan. This will depend on the reason for your bankruptcy, and the ability of your lender to navigate the rules associated with bankruptcies. However, for conventional home loans, you’ll have to adhere to a seasoning period of two years in most cases.
Are There Certain Terms & Conditions to Adhere To?
As with any adjustment to a loan in the form of refinancing, there are certainly terms and conditions to adhere to. These can range from having some equity in your home before even thinking of applying for refinancing. Especially if you’ve had a bankruptcy in your past. This also varies if you are looking to take cash out of the transaction.
Cash out refinances have different requirement with the different government programs. Demonstrating creditworthiness in the form of financial responsibility (timely payments, attempting to reduce debt as much as possible, steady employment, etc…) can all help your overall cause. You’ll also want to have a plethora of documentation surrounding your request to ensure if any questions arise, you’ll have a well-structured and prepared answer.
Benefits of Refinancing Your House After Bankruptcy
There are three main benefits to refinancing after bankruptcy.
1) Possibility of lowering your payment
This can be accomplished by changing the term of your mortgage. You may also choose to keep the same term but lower your interest rate.
2) Obtaining Cash Out of the Equity in Your Home
Taking much needed cash out of your property for improvement, debt consolidation, or other purchases that were delayed during bankruptcy.
3) Adjusting the Terms of Your Current Mortgage
Changing the term of your mortgage or getting out of a risky adjustable rate mortgage to pay off your mortgage sooner. All these reasons can help put you into a better overall financial situation.
Choosing a Company to Help Refinance Your Mortgage after Bankruptcy
If you’re searching for a bankruptcy mortgage company who can help you rebuild your life post-bankruptcy, then look not further. You will find that our team has the experience, expertise, and excellence to navigate the home loan process. We are experts at identifying items that may be overlooked by other bankruptcy mortgage companies.
Feel free to contact us to learn more about our offerings and we’ll be sure to reply to your inquiry as soon as possible. We look forward to hearing from you soon!
Published (May 3rd, 2018)
Author: Peoples Bank Mortgage