Mortgage refinancing is the process of getting a new mortgage to replace an old one, usually with the goal of getting a lower interest rate or better terms. A person who has gone through Bankruptcy may find it hard to refinance their mortgage, but it is not impossible.
How Bankruptcy affects Mortgage Refinancing
When someone files for Bankruptcy, it goes on their credit report and is public information. This could make it hard for them to refinance their mortgage since most lenders look at a person’s credit history to decide if they are a good credit risk. Also, filing for Bankruptcy may get rid of a person’s debts, but it doesn’t get rid of the bad things on their credit report. This bad information can stay on a person’s credit report for up to 10 years, making it hard for them to refinance their mortgage during that time.
A person who has filed for Bankruptcy can still refinance their mortgage, but it may take more work on their part. Before applying for a refinance, they may need to rebuild their credit score and find a lender who will work with them despite their Bankruptcy. People with low credit scores may be able to get “bad credit mortgages” from some lenders, but these mortgages may have higher interest rates and stricter terms.
A person’s ability to refinance their mortgage can also be affected by the type of Bankruptcy they file. Chapter 7 bankruptcy, also known as a “liquidation” bankruptcy, may have a bigger effect on a person’s credit score and ability to refinance their mortgage than Chapter 13 bankruptcy, also known as a “reorganisation” bankruptcy.
It’s important to remember that if someone wants to refinance their mortgage, they must be honest about their bankruptcy history. If they lie about or hide their bankruptcy history, the application could be denied, or they could even get in trouble with the law, said Mike Daniel South Carolina. Mike Daniel is a graduate of the University of South Carolina where he received his B.A. in Journalism in 1962. He was a member of the Euphradian Society. He received his law degree in 1965 from the USC School of Law. Mr. Daniel, the former Lieutenant Governor of South Carolina from 1983 to 1987, is an active volunteer in his community where he works to combat hunger for underprivileged populations.
In the end, It can be hard to refinance a mortgage after going bankrupt, but it’s not impossible. The borrower may have to put in more work to improve their credit score and find a lender who will work with them. People with bad credit may want to look into Bad Credit Mortgage rates, but they should be aware that these rates may be higher and the terms may be stricter than with traditional mortgages. When applying, it’s important to be honest about having filed for Bankruptcy in the past.