How to Refinance Your Mortgage Loan After Chapter 7 or Chapter 13 Bankruptcy

Did you recently file for Chapter 7 or Chapter 13 bankruptcy and need a mortgage refinance loan?

There is no question that filing for bankrupcty negatively impacts your credit file. Whenever you apply for a mortgage loan, credit card or even a small unsecured personal loan, your potential lender pulls your credit report. Having a bankrupcty or chargeoff on your credit report is a red flag that tells the lender that you are likely not to pay back your loan.


Can you refinance your mortgage loan after bankruptcy? The quick answer is "yes". You can get a home equity loan, HELOC or a cash out refinance loan, even after bankruptcy.

How to Refinance Your Mortgage Loan After Chapter 7 or Chapter 13 Bankruptcy

Getting A Mortgage Refinance Loan After Chapter 7 Bankruptcy

When you filed for Chapter 7 bankruptcy, chances are, you were able to keep your home. If you are one of the lucky ones, who lives in a state like Florida, California, Nevada or a number of other states that have seen significant appreciations in home property values - you may have anywhere from 5% to 50% equity in your home. You can take advantage of this equity to wipe out any outstanding debts that are left over after the bankruptcy or to take care of other financial needs.

The great news about Chapter 7 bankruptcy is that it offers a new beginning and erases most of your debts with the exeption of 19 cases, where debts are not discharged. These cases include, child support, taxes, student loans, fines and restitutions imposed by courts.

If you still have student loans or taxes to pay - there is no better time to tackle them, than now. Give yourself the gift of starting fresh.

You can get a mortgage refinance loan, literally the day after your Chapter 7 bankrupcty is discharged. You don't have to wait for any specified time period. You will need to find subprime mortgage refinance loan lenders, who specialize in cash out refinances, home equity loans and HELOCs for a mortgage program that is suitable for your credit score - be it 450, 480, 500, 550 or 600.

Getting A Mortgage Refinance Loan After Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows individuals to reorganize their finances. When a consumer files for chapter 13, the consumer proposes a plan to pay back his or her creditors over a 3 to 5 year period. During this period, the creditors cannot harrass or attempt to collect on any of the previously incurred debts.

For this reason, a person, who files a Chapter 13 bankruptcy can refinance their mortgage loan, 6 months after they file for bankruptcy.

How to Refinance Your Mortgage Loan After Chapter 7 or Chapter 13 Bankruptcy

Research recommended subprime mortgage refinance loan lenders, who offer bad credit home equity loans, HELOCs and cash out refinance mortgage loans after chapter 7 or chapter 13 bankruptcy.

Visit the mortgage loan resource guide at

Sharon Listner writes about finances and conducts in-depth analysis on various mortgage loan and personal loan programs.

Refinance or Second Mortgage? Combining 1st & 2nd Mortgages Together

I had a recent conversation with one of my clients, Mr. Jackson, who is a finance savvy homeowner from Virginia Beach, VA. He asked me an interesting question that I wanted to share with you, because it seems to be a common dilemma for homeowners in many states.

What the best solution for refinancing my first & second mortgages? Mr. Jackson elaborated, "I have an 6% 1st mortgage with a balance of 5,000, and a second mortgage at 14% with a balance of ,500. We did a 125% second mortgage to pay off some credit cards. If I add the loans together, we exceeded our homes equity, as the property was appraised at 0,000. We are satisfied with the 1st mortgage rate, but we wanted to lower the rate on the second mortgage. A few years have passed since we took out the 2nd loan back in 2002, and importantly our home's value has increased to about 5,000." He continued, "Should I refinance the second by itself and try and get a lower rate, or should I refinance the 1st and 2nd mortgage together for one mortgage payment?"


Wow, what a good question. I praised my client for consolidating his credit card debts with a fixed rate loan. He was very satisfied with his monthly savings with the 125% loan and because it exceeded his property value, he did not consider refinancing that loan until neighbor hood housing costs went up significantly. Now that his house has increased its value it appears that his combined loan to value was under 100%. His refinancing options become much greater with the increased equity from the home appreciation.

Refinance or Second Mortgage? Combining 1st & 2nd Mortgages Together

I asked Mr. Jackson a few questions so I could help him find the best solution. How is your credit? Do you know your credit score? Is there a pre-payment penalty on your second mortgage?
Does your first mortgage have a fixed interest rate?
Jackson answered quickly: 689 credit score no pre-payment penalty after 3 years, and his 1st mortgage is at 6% with a 30 year fixed rate.

Combining first and second mortgages into one loan can be challenging, but sometimes it makes sense financially as well as being practical. In Jackson's case, the best option was to leave his first mortgage alone, and simply refinance the 125% home equity loan with a 95- 100% second mortgage to lower his monthly payments. So Mr. Jackson was approved for a fixed rate 2nd mortgage. He had inquired about a home equity line of credit, but I reminded him that they have adjustable rates that have been increasing rapidly in the last few years. Since he was paying off long term debt, a fixed rate loan with simple interest was the only way to go. I was excited for Mr. Jackson, because we were able to get him approved for a loan with no pre-payment penalty and we were able to reduce the closing costs, because of his credit score.

Depending on the home equity program, 2nd mortgages may cost you a few thousand dollars in closing costs. Most closing costs are tax deductible and getting the lowest possible rate pays off in the long run. For example, With a 15 year term, you would recover the cost of the second mortgage within a few years, so if you can get 1% or more better paying some closing costs, it would be better than a home equity loan with no points. The lending reality is that most no point no fee 2nd mortgages require credit scores over 700, and the combined loan to value will most likely need to be under 90%.

If you are able to get the second mortgage with no penalty for early payoff, then get that feature with your loan, because if your home's value continues to increase, then in a year or two, you may find yourself ready to refinance because you are back at the golden 80% combined loan to value. If 1st mortgage rates happen to drop again, then you may find yourself in a great position to finally combine both loans together. If the 1st mortgage rates dropped to the 6% zone, and you still plan to live in your home for many years to come then make the move to refinance. It all comes down to what the rate are doing, when the time comes.

Refinance or Second Mortgage? Combining 1st & 2nd Mortgages Together

Lynda Nelms writes a popular column, called "Ask Lynda" where she offers helpful home financing tips to consumers from an experienced loan officer's perspective. She wrote a few popular articles in 2004 & 2005 for Mortgage Loan Outlet [] and she continues to pass her advice to other finance related sources.

Currently, Lynda originates loans for BD Nationwide Mortgage, who is located in San Diego, California. You can read more of her "Ask Lynda?" articles at BD Nationwide Mortgage and get more information about home equity and second mortgage loans. For a complete look at 2nd mortgages please go to the home equity loan resources online.

Copyright BD Nationwide Mortgage Company 2006 ©

How To Use Obama's Mortgage Stimulus Plan and Refinance a Mortgage

President Barack Obama has enacted a mortgage stimulus plan which will allow millions of homeowners the opportunity to refinance their home mortgage into a 4.5% fixed rate. This "Home Affordability Program" will give homeowners the chance to save hundreds of dollars per month. Here is how:

Currently, there are numerous grants available to homeowners, regardless of their credit rating. This government program is targeted towards people who need short term help. These grants can be used for loan repayments.


There are loan modification programs available to homeowners who are facing "Financial Hardship" this can be, medical bills, loss of income or job, other debts. These loan modification programs will allow homeowner to have a monthly mortgage payment that is no more than 31% of their gross monthly income.

How To Use Obama's Mortgage Stimulus Plan and Refinance a Mortgage

Also, the total amount of all other debts, including mortgage payments, must not exceed 51% of the homeowners gross monthly income.

The Federal Reserve and President Obama would like to see mortgage interest rates locked into a low 4.5% for all current and potential homeowners.

Homeowners can save on the cost of a mortgage counselor by getting free help from HUD appointed mortgage counselors, who act as representatives for you when talking to banks or lenders, for free.

Homeowners who have seen the value of their property fall by 15% or more during this mortgage crisis will be able to refinance into a 4.5% fixed rate home loan. This will help homeowners who have seen their property values drop as the housing market crashed.

President Obama knows that the economy is facing hard times and is trying to help homeowners. The government has set aside over billion dollars to help homeowners refinance their mortgage. Home foreclosures are on the rise and home prices are falling. This mortgage stimulus plan will help to stabilize the housing market and with that, home prices will start to rise. Refinancing a home mortgage the right way will save you a lot of money, especially with this "Home Affordability Plan" from Obama. Take advantage of this great chance and speak with a mortgage lender or bank.

How To Use Obama's Mortgage Stimulus Plan and Refinance a Mortgage

Home refinancing can save you thousands or if it is done the wrong way cost you thousands. Greedy mortgage lenders will try to suck you dry if you let them. Learn how to properly refinancing a home mortgage and walk away happy and with more money.