Posted: 1 Nov '21

Questions to Ask Your Broker about Mortgage Refinancing After Bankruptcy

Questions to Ask Your Broker about Mortgage Refinancing After Bankruptcy

After declaring bankruptcy, owning a home may seem impossible. However, you can purchase a home after declaring bankruptcy and paying your debts. If you’re considering mortgage refinancing after bankruptcy, you may not know where to start the refinancing process. Here are several questions you can ask your mortgage broker. Call us today to have your questions answered.

Do I qualify for mortgage refinancing after bankruptcy?

Yes, you qualify for mortgage refinancing after bankruptcy. As long as you pay your debts as instructed, improve your credit score, and maintain a stable income source, you qualify for mortgage refinancing.

How long do I have to wait after bankruptcy discharge to apply for mortgage refinancing?

The period you have to wait depends on the lender. For example, prime lenders, on average, have a two-year waiting period after discharge from bankruptcy. This means that once you officially complete your bankruptcy, you have to wait two years before seeking mortgage refinancing after bankruptcy. However, two years is the minimum period. Some lenders have a waiting period of three to five years. 

Do I have to refinance with my bank after bankruptcy?

For most homeowners, refinancing a mortgage with a bank or prime lender is the best solution. However, after bankruptcy, prime lenders may not consider you for refinancing. Fortunately, you can refinance with private lenders. Your bad credit mortgage broker can help you find alternative lenders in your area and find your suitable mortgage rates even with a bad credit score. 

What are the benefits of mortgage refinancing after bankruptcy?

There are several advantages of mortgage refinancing after bankruptcy. First, you can take out the equity in your home and use the cash to pay debts and expenses and invest. Second, refinancing is an opportunity to consolidate all your debts and pay them off as one monthly payment. 

Third, if your mortgage is about to expire, mortgage refinancing is an excellent opportunity to switch from an adjustable-rate mortgage to a fixed-rate mortgage and vice versa. Working with a fixed-rate mortgage may suit you because it has regular and manageable monthly payments. 

How much does my credit score affect my mortgage refinancing options?

Your credit score is one of the most critical elements in mortgage refinancing. Lenders use your credit score to determine your risk and interest rates. Unfortunately, after declaring bankruptcy, your credit score takes a significant hit. This means that lenders are less likely to offer mortgages. 

However, you can improve your chances of mortgage refinancing after bankruptcy by re-establishing your credit. You can do this by opening a line of credit, for example, a credit card. Use at least two credit cards and pay all your bills on time to improve your credit score and qualify for mortgages. 

What can I do to improve my chances of mortgage refinancing after bankruptcy?

The most important thing you should do after bankruptcy is to work on your credit score. You can do this by establishing a line of credit and paying your credit debts on time. However, there are other things you can do. 

Make sure you have a consistent and reliable income. Your income assures lenders that you can pay your debts for the period of your contract. Also, find ways to increase your income. 

In addition, pay all your bills on time. Whether phone, electricity, water, or insurance, make sure you pay it on time to improve your credit report. 

Where can I find mortgage refinancing after bankruptcy?

Bad credit brokers are the best option after going bankrupt. Dominion Lending Centres can help you find mortgage refinancing after declaring bankruptcy. Contact us today for alternative refinancing options in Canada.