Many years and decades ago, having to file for bankruptcy might often have been seen as the end of the road for many people. Bouncing back from losing many assets in order to pay overwhelming debts might have been a nightmare come true for people who had to go through such an ordeal. However, in this day and age, more and more people may be able to survive a bankruptcy filing and continue on with their lives normally. Consumers who had to go through bankruptcy might think that they probably would not be able to get a loan in the future. However, there are now many options for bankrupt consumers to choose from so that they can still afford to maintain their home. For example, applying for a bankruptcy second mortgage may be worth a shot if you know what to do.

In general, a bankruptcy second mortgage may be one of many favorite options for people who had to go through bankruptcy but still managed to retain ownership of their home. Such people usually had to file Chapter 13 bankruptcy where they would have to follow a repayment schedule monitored by the court in order to pay off their debts. Many Chapter 13 bankrupts may opt to apply for a second mortgage on their home after they file for bankruptcy in order to prevent more damage from being done onto their credit scores and to reestablish their credit. This may be mainly because their homes would be used as collateral and therefore mortgage companies would be more willing to offer decent interest rates even with bad credit. Of course, this may work provided you have a decent amount of equity in your home.

Applying for second mortgages after bankruptcy may prove to be a challenge for bankrupts but the trend now, especially for those who had to file for Chapter 13 bankruptcy, may be to apply for a second mortgage right after the discharge of their bankruptcy. However, these applicants may normally find that they would be charged a higher than usual interest rate. Many financial advisors would probably advice to wait a while before submitting a second home loan application after bankruptcy. This is to allow a cooling off period of at least two years so that the credit score may be repaired. A repaired credit score may usually mean better interest rates as well as higher chances of a successful application. Of course, some applicants may be lucky to get reasonable interest rates with their second home loan application even before the minimum two year period. This may be due to the high equity they probably have on their homes.

Applying for mortgages right after bankruptcy may be a popular option among bankrupts who wish to continue on with their lives normally and reestablish their credits. However, the validity of taking such option may have to be determined according to individual circumstances. Basically, it may not be the right choice for every single person who has bankruptcy in his or her credit history. This is why many financial advisors may ask applicants to look into their own finances to see if the option may be the right one for them. Thorough research may enable applicants to find a mortgage company that would give them reasonable interest rates that would suit their current financial capabilities as well as future financial plans.

Generally applying for a second home loan after filing for bankruptcy may be a viable option. However, it has been said that good things come to those who wait. In this case, applicants may be able to enjoy better interest rates if they allow the waiting period to be over before finally applying for the loan so that they may get the best deals even with poor credit.

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Category: Finances
Keywords: bankruptcy second mortgage, second mortgages, mortgages