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Making the Decision to Refinance an Illinois Mortgage After Bankruptcy
(presented by www.refinance-refinance.net - mortgage lenders)
By Jane A. Hale
If you are looking to rebuild your credit after bankruptcy, an Illinois mortgage refinance can help. But making the decision to refinance can be tough. There are a lot of considerations that should factor into your decision.
Timing
A bankruptcy can have a negative effect on your credit rating. In most cases, bad credit will not stop you from getting an Illinois mortgage refinance, but it will sometimes prevent you from getting standard rates and terms. Before making the decision to refinance a mortgage after bankruptcy, you should make sure the timing is right. Your credit score, current finances, Illinois interest rates, and future earnings are all important factors to consider.
Upfront Costs
An Illinois mortgage refinance isn’t free. You incur immediate out of pocket expenses in the form of closing costs. These costs typically average just under $3,000 for Illinois residents. If you don’t have the money to cover the fees, you can try to get a no closing costs refinance. Keep in mind though that the costs will be rolled into your loan, meaning that you will eventually have to pay them back with interest.
Interest Rates
When refinancing after bankruptcy, your main focus should be on interest rates. Unless there are special circumstances, you should never refinance into a rate that is higher than the rate your currently pay. To get an idea of average rates, you can do a search on the Internet or speak with a mortgage broker or lender. Right now, interest rates on Illinois refinance loans average 5.57 percent. Of course, you will probably be expected to pay a higher rate if you have a credit score of less than 650. To get the best rate, solicit quotes from several different lenders so that you are able to compare your options.
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