Refinance After Bankruptcy - Refinancing with a Low Credit Score

Refinancing after a bankruptcy can help you access your homes equity at rates better than other forms of credit. You can also use it to lower your rates and payments after your bankruptcy has been discharged for awhile. The important thing is to look for the right lenders so you dont get caught paying high interest rates.

As soon as your bankruptcy is discharged, you can refinance your home. However, your credit score will be near the bottom at first, so your rates will be high. Expect rates to be 10% or higher right after bankruptcy.

But your credit score doesnt have to stay at the bottom. In two years, your score can be in the 600s and enjoying near conventional rate offers. Even though your bankruptcy will be on your record for seven to ten years, its impact will lessen each day. Lenders are more concerned about how you are using credit in the last year.

Cashing out your equity is one reason to refinance. Using your homes equity as collateral will qualify you for better rates than if you went with other forms of credit. A home equity loan can be used as a tool to rebuild payment history.

Another reason to refinance is to lower rates on other debts. To get the most out of this strategy, wait at least two years after discharge. You may also want to look at your credit report to be sure you get full credit for your good record.

Shopping lenders will save you money on refinancing. In the past, people accepted whatever rate the local sub prime lender offered. Those days are over with the internet. Now you can get dozens of loan quotes in a few minutes.

Take the time to go over those offers. The APR is the number you should be primarily concerned about, but also look at their terms and fees. Dont be afraid of asking questions before you sign any loan contract. Legitimate lenders will offer great customer service by promptly getting back to you.

See Also:

Bankruptcy Tips And Helpful Alternatives
Before you file bankruptcy, it is a good idea to look into other alternatives if at all possible. New bankruptcy laws make it more difficult to file than it used to be.Why Has Filing For Bankruptcy Doubled?From the period of 1994 to 2004, filing for bankruptcy has doubled. Bankruptcy filing has ... more...

Bankruptcy Information - Common Courtroom Terms
Bankruptcy- Bankruptcy Terminology, 45 Terms to Know and UnderstandMany debtors and creditors know little of the bankruptcy process. These terms are to help assist individuals in understanding bankruptcy. The terms provided are as defined from the Public Information Series of the Bankruptcy Judges ... more...

Bankruptcy: What You Need to Know
Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. Many people do not realize that there are five types of bankruptcy options available under the U.S. Bankruptcy Code; however, for most consumers there are really only two viable options; Chapter 7 and ... more...

Navigation After Financial Closure - Bankruptcy Personal Loans
Bankruptcy has a stigma attached to it that is hard to eradicate. Is that what you really think, then you need to rethink. Just because you have filed for bankruptcy does not mean you do not have a right to a solid financial status again. Bankruptcy is as much deserving of a personal loan for ... more...