Where to Refinance

Too often, people feel that the black mark left by bankruptcy is an obstacle that they cannot overcome. Rather than shopping for a mortgage, they go directly to a sub prime lender, or worse, a lender who involves themselves in predatory loan practices. While sub prime lenders do have their place, they should not be your first choice. Lenders who involve themselves in predatory practices, such as excessively high interest rates, or interest compounded on an irregular schedule should be avoided at all costs. They will not help you.

Sub prime lenders are not likely to provide you with as low of an interest rate as you can receive from a traditional lending institution. Following a bankruptcy, your first stop in refinancing your home should be the lender that holds your mortgage currently. Not only do they know your payment history, and the home, they may also save you some money in closing costs by keeping the loan "in house". If they are not willing to refinance your mortgage, ask them what you should do to make yourself more attractive. If they recommend that you come back after three to six months, which is probably the best advice. If they are not interested in refinancing your mortgage, don't let it discourage you, shop mortgages at other traditional lenders.

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