Can I Refinance My Home After Chapter 13 Bankruptcy?
In the past several years, many people have been able to take advantage of low interest rates on home loans to help reduce their monthly financial obligations. People who have previously filed for bankruptcy protection under Chapter 13 may be wondering if there is any way they can improve their financial situation further by refinancing their homes.
While having a bankruptcy on your credit report presents a challenge to securing refinancing, it does not preclude homeowners from being able to refinance. When seeking refinancing, lenders will apply many of the same conditions to homeowners who have a bankruptcy on their record as to those that do not. Understanding how to position yourself so that you can take advantage of low interest rates can call for the help of a skilled bankruptcy attorney who can help ensure you take all the right steps to maximize the benefit you receive from refinancing.
Some of the conditions for securing refinancing through the FHA include:
- Having good credit
- Having a satisfactory employment record
- Permission from the trustee
In the case of FHA loans, the homeowner must also have been paying on his or her current loan under the Chapter 13 repayment plan for at least one year. For those seeking refinancing through a conventional lender, the amount of time that may need to have passed may be longer.
The key to making the most of any possible refinance is understanding how the circumstances of your situation will fit with the criteria a lender is using to evaluate potential loans.