If you think your bankruptcy is keeping you from taking advantage of today’s low refinance mortgage rates with the best mortgage lenders like Amerisave, it’s worth looking into once the appropriate amount of time has passed. There are steps you can take to reestablish credit history while you’re waiting to qualify. Here are the basics you need to know about mortgage refinancing after bankruptcy.
Time Heals Almost Everything
Freddie Mac has guidelines for reestablishing credit after the dismissal date of your bankruptcy. Under Chapter 13 bankruptcy you’ll have to wait 48 months from dismissal if your bankruptcy was caused by “financial irresponsibility.” If your bankruptcy was due to illness, loss of income or divorce you may be able refinance after 24 months. Fannie may follows similar rules and you’ll be required to wait four years from your dismissal date or two years from the discharge date.
If the time-frame hasn’t passed you still might be able to get way with mortgage refinancing with an FHA home loan. FHA mortgage refinancing has one disadvantage though; you’ll be required to pay private mortgage insurance with any FHA home loan. HUD requires that all of your payments be made on time and you might need written permission from the bankruptcy court to go forward refinancing your home. The transaction will need manual underwriting which means more red tape and headaches, but it can be done.
You can learn more about your mortgage refinancing options while avoiding unnecessary fees and markup by checking out my free Underground Mortgage Videos.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
