Refinancing Your Mortgage Despite Bankruptcy

Although it can seem disastrous, having to file for bankruptcy, it is possible to do at least one refinancing transaction and that is refinancing a mortgage. A mortgage is based on a financial asset and the value of that asset is not affected by the fact that you have filed for bankruptcy and now have a poor credit rating. Of course, there is a set timeframe after filing for bankruptcy before one can refinance a mortgage but that timeframe is relatively short.How to Raise A Poor Credit ScoreWhen you refinance a mortgage it is actually a very good way to improve your credit standing. Once you start making monthly payments on a regular basis, this will register on your credit history and show an improvement in your financial standing.There is a period of time required after filing for bankruptcy before it is possible to apply for refinancing of a mortgage which is usually six months. During that time, it will be crucial to make payments and transactions promptly. Being diligent during these six months will pay off because it will be reflected in your credit history. This will also work to your advantage when you apply for any refinancing.How to Prepare for Your ApplicationIn order to prepare for applying for refinancing, you will need to be very prompt with your payments in the six months after you filed for bankruptcy. Failure to do so, in the form of late or missed payments, will be a blot on your credit history when applying for refinancing your mortgage.Another important step is to open either a savings or checking account and apply for a credit card. It might not be possible to get an unsecured card due to your poor credit history but do not let that stop you. Get a secured card and begin using it. Of course, you will want to be prompt in your credit card payments which will also help towards improving your credit history. Have a credit card and being prompt with your payments on it will be another proof in your favor when you apply for refinancing for your mortgage.Find a Loan Financier and Get EstimatesFinding someone who will help loan you the money you need is your first priority. Possibly this might be the same person who financed your original loan but that is not necessarily the case. Shop around and get different estimates to see what is most advantageous. Ask every loan financer you meet for an estimate. You can even trying going online to find loan offers. This way, you can find the best possible options.Keep an Eye Out for Interest Rates and Hidden FeesIt is important to keep a close eye on the interest rates. The conditions of the interest rates can make or break you. Also scrutinize the fees charged as some of these can be corrective that will take effect if the loan is cancelled. Be sure you understand the interest rates and hidden fees. Without that, you might find that refinancing a mortgage might be more problematic than it is worth.When you apply for refinancing of a mortgage, the agent might try to charge you a higher interest rate because of your previous bankruptcy. Although this might be a factor in some circumstances, mortgage loans are established on the value of a certain asset. Actually, the fact that you have a low credit rating should not affect the interest rate on your loan.