Most people who are having trouble paying their bills have no choice but to file for bankruptcy. Many people worry that if they file for bankruptcy, their credit will be ruined for the rest of their lives. However, they find that they can start rebuilding their credit as soon as the bankruptcy is over.
Get Your Debt under Control
You can start over with your money when you file for bankruptcy. Your old debts will be erased, but any years of good credit will also be gone. If you're in a bad spot, bankruptcy can be a great stress reliever, but it's important to know what led you to that point. If you file for bankruptcy and don't change the way you spend money, you will end up in the same situation again. The best thing you can do with bankruptcy is to learn from it. Know where you lost control of your spending and be ready to move on.
Cut down on your costs.
Refinancing your home mortgage is one of the best ways to cut your costs. You might think it will be hard to find a lender to refinance your mortgage after filing for bankruptcy, but that's not the case. Depending on your situation, you may be able to go to a bank the day after the bankruptcy court releases you from your debts and refinance your home mortgage. After filing for bankruptcy, it will be much easier to refinance your home if you have a lot of equity in it.
Even if you don't have much equity in your home, you should be able to refinance your mortgage six to twelve months after your bankruptcy is over. There are a few things you can do while you're waiting to refinance your home to make yourself more appealing to lenders.
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Pay your bills when they are due. This includes your current mortgage and any utility, student loan, or other bills you have after filing for bankruptcy.
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Don't try to open any other lines of credit, like new credit cards or store lines of credit. Even though credit is important, if your main goal is to refinance your mortgage after a bankruptcy, you don't want the bank to think you're in danger of falling into the same credit trap you were in before your first bankruptcy.
Why should you refinance your home loan after filing for bankruptcy?
What are the benefits of refinancing your home mortgage after filing for bankruptcy? There are many reasons why this is a good idea. You can lower your monthly payments in a number of ways by refinancing your mortgage. You can lower your monthly payment by extending the length of the loan or refinancing at a lower interest rate. Even though you'll be considered a higher-risk borrower and won't get the best interest rate, it's still possible that your rate will be lower than when you first got your mortgage.
Another reason to think about refinancing your home mortgage after filing for bankruptcy is that it will put you on the path to fixing your credit right away. The new loan will show up after the refinance. The old loan, which may have had late or missed payments because of the money problems that led to your bankruptcy, is now closed. There will be no late payments or fees on the new loan.
"Where to Refinance" (b):
Too often, people think that the mark of bankruptcy is something they can't get past. Instead of looking around for a mortgage, they go straight to a subprime lender or, even worse, a lender who uses predatory lending practises. Even though subprime lenders have their place, you shouldn't go to them first. Lenders who use predatory tactics, such as interest rates that are too high or interest that is added on at odd times, should be avoided at all costs. They won't be able to help you.
You are not likely to get an interest rate from a subprime lender that is as low as what you can get from a traditional lender. If you've just filed for bankruptcy, the first place you should go to refinance your home should be the lender who holds your mortgage now. Not only do they know your payment history and the home, but keeping the loan "in house" may also save you money on closing costs. If they won't refinance your mortgage, ask them what you can do to make yourself more appealing. If they tell you to come back in three to six months, that's probably the best thing to do. If they don't want to refinance your mortgage, don't let that stop you from looking at mortgages from other traditional lenders.
