Monday, December 12, 2016
Will Bankruptcy Hurt My Chances To Refinance My Mortgage?
When you are in over your head financially, there are a lot of options to help get you back on your feet. You can call your creditors and ask them to give you a lower interest rate, or to defer some of your payments. You can also take out a consolidation loan and wrap all of your payments into one lump sum payment each month. You can try to take equity out of your house by doing a refinance, which might also lower your interest rate. And you can also file for bankruptcy, so certain debts are eliminated and you are then able to pay what debts do remain.
But what if you want to refinance your house, because the benefit of having a lower rate and lower payment for the duration of a typical 30-year mortgage is long lasting, but also need to file for the protection offered by bankruptcy? Will bankruptcy hurt your chances to do a refinance of your mortgage, or should you refinance first and then file a case? Here are some pointers on the subject:
• If you refinance before you file a bankruptcy case, you can reaffirm the refinanced mortgage debt and still get the benefit of the bargain you made during the refinance.
• If you wait until after your bankruptcy case is over, you might not get to refinance right away because lenders will want to see a pattern of regular payment for a few months prior to making you a new loan.
• If you file a Chapter 13 case you might be able to put the past due mortgage payments in your plan in such a way that you pay them out over a period of time, instead of having to get current right away. In this way, you get the benefit of being considered current on your mortgage payments while actually making the payments that get you to a current status.
Whatever your needs, call us to find out what option will work best for you. Your home is your most valuable asset, and we will work with you to find a way to keep you and your family in your house, at a payment you can afford.
For more information about bankruptcy cases, call us today or reach us online at www.law-ri.com.