Bad Credit Mortgages
Is it a Good Idea to Refinance a Mortgage After Bankruptcy?
A lot of folks in Kentucky have been refinancing their mortgage as of late. Rates are extremely low—currently 5.59 percent—and homeowners have been able to reap the benefits by exchanging their old mortgage with a new one. If you have a recent bankruptcy on your record, you may be wondering whether or not it is a good idea for you to consider refinancing too. The answer depends on your situation.
Refinancing to Get a Better Rate
Depending on how long it has been since you filed for bankruptcy and the state of your credit score, you may be able to get a better rate now than you did with your original mortgage. A low rate can lower your monthly payments and allow you to use any extra cash left over to pay other bills and rebuild your savings. Even if your rate is decreased by only a point or two, you could save yourself thousands of dollars over the life of your loan.
Refinancing to Get Better Terms
Another good reason to consider refinancing your Kentucky mortgage after bankruptcy is to get better terms. Perhaps you have a balloon payment you can’t afford to make or perhaps you need to stretch that 15 year loan into a 30 year loan. Whatever the case may be, a new loan will help you get rid of undesirable terms.
Refinancing to Get Cash
A final reason to consider a Kentucky mortgage refinance after bankruptcy involves borrowing from your equity. Kentucky homes have seen a significant increase in value in the last few years. You could be sitting on a large chunk of cash that could be used to buyout your bankruptcy, consolidate debt, or make necessary home improvements. If you can afford to make the payment, a post-bankruptcy Kentucky cash-out refinance can be a great financing resource.
