FHA mortgage refinance loans actually enable FHA loan applicants the ability to buyout their Chapter 13 Bankruptcy. One requirement is that  they must document a timely payment history for the chapter 13 Bankruptcy trustee. The other FHA refinance requirement is that the FHA loan applicant has had the Chapter 13 bankruptcy for at least 12 months. FHA refinancing a chapter 13 bankruptcy makes sense because it enables FHA loan applicants in a Bankruptcy the ability to a lower fixed rate FHA mortgage by simply showing FHA mortgage lenders that you have made the chapter 13 bankruptcy payments on time in the last (12) twelve months.

In addition, to helping chapter 13 FHA loan applicants aka bad credit borrowers save money and reestablish their credit quicker, an FHA mortgage rate is a very competitive interest rate that are typically 2-5% lower than the available subprime mortgages in the current financing market. Maintaining a good chapter 13 bankruptcy payment history for your bankruptcy you are eligible to refinance and lower your monthly obligations.

Important facts to remember about refinancing a chapter 13 bankruptcy with an FHA mortgage:

PAY ALL YOUR BILLS ON TIME- While in a chapter 13 bankruptcy it’s is important to be able to show that you are making your payments on time. By consistently making your mortgage payments on time, especially on your home or payments to the trustee, you can turn your credit around as well as possibly open up opportunities to buy out of your bankruptcy, which will save you money.

CHAPTER 13 LETTER EXPLATION- Write a good letter of explanation as to what unforseen circumstances caused you go go into chapter 13 bankruptcy, what you learned from the situation, and why it wont happen again?  Did you lose your job, or have an emergency and have to go to the hospital?.  Show the FHA lender how you have turned things around for yourself. You will also  need to receive permission to enter into a new FHA mortgage transaction and having this information will be helpful for you and your lawyers.

BANKRUPCY DOCUMENTS- You will need to provide every page of the chapter 13 bankrupcy documents from  the courts and the trustee. 

AFTER PROOF OF 12 MONTHS ONTIME PAYMENT HISTORY YOU CAN FHA REFINANCE-  The HUD website can provide more details, but if the FHA mortgage lender documents that more than 12 months have passed without any late payment then a borrower should be able to obtain a FHA loan. As mentioned earlier, the borrower will have to receive permission from the court in order to go into a new FHA mortgage transaction.

Click the START NOW to get Pre Approved Today!