How to Refinance After a Bankruptcy

refinance after a bankruptcy

Can you Refinance a Home Loan after a Bankruptcy?

Yes you can! There are a few different types of loan programs that allow you to refinance after a Bankruptcy. Fortunately, Ocean Lending offers some of these loan programs, so you are at the right place! We understand that going through a bankruptcy can be a draining process, on you and your credit. That is why Ocean Lending is here to make this an enjoyably easy process, and why we offer unique programs that allow us to help you refinance a home loan after a bankruptcy, all the way down to a 500 FICO score.

How do I Refinance my Home Loan after a Bankruptcy?

At Ocean Lending, we often hear this question, so we wanted to take the time to address this topic, in order to equip you with all the pertinent information that will help you come out on top, regardless of the route you take. The first step is to figure out what kind of Bankruptcy you went through. There are 4 types of Bankruptcies:

  • Chapter 7
  • Chapter 11
  • Chapter 12
  • Chapter 13

We will primarily focus on Chapter 13 Bankruptcies, as they are one of the most common Bankruptcies in which someone will have the opportunity to refinance.

The next step, if you have experienced a Chapter 13 Bankruptcy, is to determine your Bankruptcy’s status, it will either be:

  • Active
  • Discharged
  • Dismissed

Along with the status, it is important to know:

  • When you entered the Bankruptcy
  • The final payoff date
  • The date of discharge or dismissal (if your BK was discharged or dismissed)

Rest assured that regardless of the status, Ocean Lending still has options that may help you refinance after a Bankruptcy. There are a few different types of loan programs that are available to those who have experienced a Bankruptcy, in the next section we will go over the available Loan Options.

BUT WAIT! Just because this article primarily discusses information regarding how to refinance a home loan after a Chapter 13 Bankruptcy, does not mean that we cannot help you if you have experienced a Chapter 7, 11, or 12 Bankruptcy. Ocean Lending has options that may still help you! Chapter 7, 11, & 12 Bankruptcies require much more attention to detail, that being said, we would love to speak with you further, over the phone, to best determine how we can help you. To speak with a Loan Expert, you can call us today at 949.613.5669. OR if you would like a Loan Expert to reach out to you, you can fill out our Quick Quote form on the right side of this page, and an Ocean Lending Loan Expert will reach out to you shortly.

BUT WAIT AGAIN! If you have experienced a Chapter 7, 11, 12, or 13 Bankruptcy, have lost your home, and are looking to purchase again , we have several options that may help you buy a home again. Check out this page within our website for more information on: How to Buy a Home after a Bankruptcy, Short Sale, or Foreclosure. Additionally, if you are in need for more information, you can speak with a Loan Expert by calling us at: 949.613.5669. OR, if you want a Loan Expert to reach out to you, you can complete the Quick Quote form on the right side of this page, and a Loan Expert will reach out to you shortly.

What Home Loans can Help me Refinance after a Chapter 13 Bankruptcy?

There are a few different types of Home Loans that can help you refinance, after experiencing a Chapter 13 Bankruptcy. As we discussed above, it is first important to know:

  • The type, or Chapter, of your Bankruptcy (7, 11, 12, 13, here we will focus on Ch. 13)
  • When you entered the Bankruptcy (the start date)
  • The status of your Bankruptcy (active, discharged, or dismissed)
  • The date of discharge or dismissal (if your BK was discharged or dismissed)

Once you have this information, you can more accurately search for the right home loan to help you refinance and Lenders will be able to more accurately direct you to the correct home loan programs. Hopefully you have this information handy, but if you are struggling to find this information, you can give us a call today at 949.613.5669 and we can help you track down this information.

Now let’s get into it! If you are looking to refinance a home loan and have experienced a Chapter 13 Bankruptcy, there are a few home loan programs that you may qualify for, the home loan programs we will discuss further are:

  • FHA insured Home Loans
  • VA insured Home Loans
  • Private Portfolio Home Loans
  • Conventional Home Loans

All of these loan programs have different qualification guidelines. Which home loan program you best fit into, is based on the type, status, start and end date, of your Bankruptcy. Below are a few guidelines to show you which loan programs may be the best fit for you. Again, we want to stress that every persons’ situation is extremely unique, and how these guidelines affect your qualification chances are unique to each scenario. For the best idea of what you may or may not qualify for, you should call us and speak with a Loan Expert; Ocean Lending’s direct line is: 949.613.5669.

These guidelines are only in reference to Chapter 13 Bankruptcies:

FHA Guidelines:

  • Active BK: If property was not included: 1 year pay out period with perfect payment history, and written permission from Bankruptcy court are required to Refinance
  • Discharged BK: If BK was due to Financial Mismanagement, 2 years from discharge date. If BK was due to Extenuating Circumstances, 2 years from discharge date. Less than 2 years on case by case basis
  • Dismissed BK: No specific guideline, decided on case by case basis

VA Guidelines:

  • Active BK: If property was not included: 1 year payout period with perfect payment history, and written permission from Bankruptcy court are required to Refinance
  • Discharged BK: If the applicant has finished making all payments satisfactorily, the lender may conclude that the applicant has re-established credit, decided on case by case basis
  • Dismissed BK: No specific guideline, decided on case by case basis

Conventional Guidelines:

  • Active BK: Active Chapter 13 Bankruptcy is not accepted
  • Discharged BK: eligible 2 years from Bankruptcy discharge date
  • Dismissed BK: If BK was due to Extenuating Circumstances, eligible 2 years from dismissal date. If BK was due to Financial Mismanagement, eligible 4 years from dismissal date

Private Portfolio Guidelines:

  • Active BK: Eligible 1 day after first 3 payments have been made on time
  • Discharged BK: Eligible 1 day after discharge date
  • Dismissed BK: Eligible 1 day after dismissal date

It is important to remember that all loan products have different qualification guidelines. Just because the status of your Bankruptcy may not disqualify from a loan program listed above, does not mean that you will fully qualify for that program. Other things such as income, debt, credit score/history, and current Loan to Value ratio, will further determine which program you qualify for. It is also important to note that the private portfolio guidelines are more relaxed, that is because these loans usually require a substantially larger amount of equity, have higher interest rates, and may involve higher points and fees, when compared to more traditional home loans.

How do I get Pre-Approved to Refinance after a Bankruptcy?

If you are looking to get Pre-Approved to Refinance your home loan after a Bankruptcy, you are in the right place. We know there is a lot of information on this page and that it can get extremely confusing when you are trying to figure out where your situation lies. If you have read this far, it is time you chat with one of our Loan Experts; together you can discuss any of your questions/concerns and find the best loan program for your unique situation. To speak with a Loan Expert you can call us any time at: 949.613.5669 OR if you would like a Loan Expert to reach out to you, simply complete the Quick Quote form on the right side of this page.

If your Bankruptcy has left you with poor credit and/or high debt payments, due to the Bankruptcy payoff amount, you should check out these pages, as they contain extremely pertinent information on: How to Refinance with Bad Credit and How to Refinance to Pay Off Debt