If you’ve filed for bankruptcy in the past, then you already know how difficult it can be to get a refinance loan or home equity loan. But if you’re willing to take the time to dig a little deeper, you might be surprised at how many very viable and downright attractive deals and options there are. The fact that you have bankruptcy on your credit report or a past or existing debt consolidation loan doesn’t seem to deter many lenders from various sources, just as it can make traditional lenders run for the hills.
In fact, many of these lenders are more than willing to offer you an attractive program or interest rate on a home loan or refinance loan. This is because they have looked at bankruptcy statistics and find that the majority of people who have filed for bankruptcy have not done so out of personal financial mismanagement, but more often because of an unexpected financial setback that is completely beyond their control lay , such as B. a layoff or large and unexpected medical bills that your health insurance will not cover.
If your bankruptcy was recent, you may have to wait six months after filing Chapter 7 or Chapter 13 bankruptcy filings to be eligible for any programs a prospective lender may be required to offer you.
Whether or not you’ve filed for bankruptcy, you need to realize that in most cases you’ll be able to keep your home if it’s not normally among the assets that need to be liquidated in order to to comply with a bankruptcy judgment. With that in mind, you almost certainly have some equity in your home, so lenders see it as a loan they are making that already has significant collateral in the form of your home. In other words, when a lender makes an offer of credit, one of the main factors that determines the program or interest rate they offer you is their risk factor. This risk factor is determined in part by the applicant’s creditworthiness, but is also heavily influenced by the collateral used to secure the loan, so if your home equity loan or refinance loan is secured by your home, the lender’s risk is minimal.
Even if the loan is secured by your home, the fact that you have filed for bankruptcy will not go unnoticed by the lender. The worst thing you can do is try to cover it up, because that fact will be highlighted on your credit report and is virtually impossible to hide. Based on your filing, you’ll probably have to pay a slightly higher interest rate than someone with perfect credit and no bankruptcy on their credit history, but this could reduce your payments and give you some financial leeway and put your finances back in order.
It’s not difficult to find a lender who will consider you with a bankruptcy on your credit report, but you must look beyond traditional lenders. There are actually companies that specialize in such loans. A little searching can find just the right lender as you work towards rebuilding your excellent credit history and moving on from bankruptcy.