3 Things You Might Not Know About Refinancing A New Jersey Mortgage After Bankruptcy

Have you had trouble making your mortgage payments because of job loss or a change in your financial situation? Did you know that refinancing may be the answer for you?

Refinancing is when a borrower gets a new loan from another lender and uses it to pay off their debts. Refinancing after bankruptcy can be an attractive option if you want to lower monthly payments, consolidate debt, and do away with high interest rates.

In this post we will identify three things about refinancing after bankruptcy that might not have been so obvious before. We'll also look at some of the benefits and drawbacks of taking on this approach to improving your credit rating.

Are you ready to learn more? Keep reading!

1. Bankruptcy Doesn't Impact Your Lender's Red Flags On Your Credit Report

When you file for Chapter 7 bankruptcy, it is essential that you inform your lender of your decision. In other words, if you don't tell the bank that you want to refinance after filing for bankruptcy, they will automatically assume that any loans made in the next year are part of your bankruptcy case. While it's true that lenders will be aware of your situation and would like to avoid dealing with a debtor that isn't reliable, lenders aren't required to question the reasons for refinancing after filing for bankruptcy.

Here's what that means for you: Even though your lender has read or seen information about your bankruptcies on credit reports, they don't have to question whether it's a good idea to refinance your loans. This means that lenders don't need to read into your bankruptcy case, when and how you decided to refinance loans, or the type of loans that you are refinancing. Instead, they are only required to look at your situation as it relates to the loan being refinanced.

2. You Have The Ability To Choose The Term Of Your Refinanced Loan

When you file for Chapter 7 bankruptcy, your lender will begin a case against you and your property. In most cases, lenders want to see that the borrower is trying to get out of debt, so they will allow you to retain some of the home equity you have built up over the years. This is when it's important to understand how refinancing works after Chapter 7 bankruptcy. If a lender sees that there isn't much equity in your home, then they may not be interested in dealing with you at all. In these cases, you may have to find a lender that does want to do business with you despite your bankruptcy status.

In some cases, the lender may also require that the borrower take out a loan for a term of five years or longer. If you have equity in your home and can afford this amount, then you may be able to get a loan at an interest rate significantly below market rates.

3. The Amount Of Interest Will Change Due To Your New Lender's Agreement With You

Under normal circumstances, the amount of interest that your lender charges on a dollar borrowed is clearly stated in their contract with you or their monthly statement. However, after filing for Chapter 7 bankruptcy, all contracts are null and void. Since lenders can't use your contract to set the interest rate on your new loan, they are free to negotiate the most advantageous terms that they feel are fair.

This is why it's important for you to take your time when you decide to refinance after bankruptcy and make sure that you match the terms of the lender's new agreement. You don't want to sign on with a lender who will charge you an exorbitant amount of interest, only to find out later that it's thousands more than what was advertised.

What To Do Next?

If this post gave you some insight on whether refinancing after bankruptcy might be right for you, check out our blog post by clicking here. The link will take you to our list of the best mortgage lenders in New Jersey for Chapter 7 Bankruptcy. Each lender has a short message explaining what factors they consider when making loans to people who have filed for Chapter 7 bankruptcy protection.

If you are ready to learn more and take action, contact us today so we can schedule an appointment and get you approved for a loan immediately. Our staff is available 8:30 am – 5:00 pm EST, Monday – Friday. We can be reached by phone at 1-866-391-3115 or via email at info@sellyourhomenjtoday.com .

Category: New Jersey Home Mortgage Refinancing Blogs, New Jersey Refinancing News , Refinance After Bankruptcy , Week of October 3rd, 2012

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For more information on Refinancing After Bankruptcy, visit RefinanceAfterBankruptcy.com today!

3 Things You Might Not Know About Refinancing A New Jersey Mortgage After Bankruptcy

3 Things You Might Not Know About Refinancing A New Jersey Mortgage After Bankruptcy

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