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Have you filed bankruptcy since you bought your home? Are you
now looking to take advantage of lower interest rates by
refinancing your home? You will probably soon realize how much
more difficult it is to finance or refinance a home after a
recent bankruptcy. It is not impossible though. There are many
companies online that will help you refinance your home.
Here are some tips to consider when refinancing after a
bankruptcy:
Even though interest rates have dropped, you may not be able to
get a lower interest rate than when you bought initially - If
you had decent or good credit when you bought your home
originally, even though interest rates have lowered recently,
you may not be able to qualify for an interest rate any lower
than you had when you bought your home originally. With a recent
bankruptcy, your interest rate is going to be quite a bit higher
than before. There are many mortgage calculators available
online that will help you analyze your current payment and
interest rate and tell you if it is better for you to refinance
your home or not.
Watch out for pre-payment penalties - Even if you can qualify
for an interest rate that is lower than what you currently have,
make sure you don't get yourself into a loan with a pre-payment
penalty. If you have a loan right now free and clear of any
pre-payment penalties, it would be a big mistake to lock
yourself into another loan for 6 months to 3 years or more. If
interest rates drop again or you need to move, you will have to
pay about 6 months of payments or interest in order to get out
of the loan with a pre-payment penalty.
Beware of predatory lenders - There are many lending scams on
the rise, make sure you are dealing with reputable mortgage
lenders. Watch out for signs of shady lending practices.
Shop around - Get loan offers from at least 3 lenders. This is a
good rule of thumb with any bad credit loan. When you can get
multiple loan offers, you can compare interest rates and fees.
Make sure you do not accept the first loan offered to you.
About the author:
View our recommended Refinance After Bankruptcy lenders. Carrie Reeder is the
owner of ABC Loan
Guide, an informational website about various types of
loans.
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