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Despite what you might have heard, bankruptcy is not a barrier to refinancing your current loan or new homeownership. After bankruptcy, you're actually encouraged to take on new debt in order to build credit. Unfortunately though, this new debt used to build credit will be closely scrutinized and those looking to refinance or buy a home after a bankruptcy are bound to face many challenges.

Read on to learn how to prepare your finances for a refinance or new home loan after you've filed for bankruptcy.

Refinance or Loan Preparation
With old debt wiped from your record, you'll have the ability to begin building a new, responsible financial history. Prepare for a refinance or home loan by:

Reading your credit report
You're entitled to a free credit report from each of the credit rating agencies. Make sure that your credit report accurately reflects the outcome of your bankruptcy proceeding. It may take the credit reporting agencies some time to catch up. If you find that one of your accounts still shows as open and overdue when it shouldn't, then contact the credit bureau and prove to them that those accounts should be 'included in bankruptcy.'

Acquiring and use a secure or unsecured credit card
Secured credit cards are a great alternative for someone who needs desperately to rebuild their credit, however you should never charge more than you can pay. Sign up for a secured credit card through a bank or another organization willing to extend a secured credit card offer. These credit cards are different from unsecured cards in that there is not a major risk for the lending institution.

You may not qualify for an unsecured credit card right away. Check periodically to see if you qualify for an unsecured credit card and acquire one as soon as available to build credit.

Paying bills on time
Take on debt and practice responsible debt management by paying bills on time. This is the single best thing bankruptcy filers can do to build up their credit rating.

Your credit score should no longer be adversely affected by the bankruptcy filing after two years of credit build and repair. Work with your Country Home Lending Source mortgage professional to ensure you're ready to start the refinance or home loan application process.

Refinance or Loan Application Process
While you might qualify for a loan, the interest rate on a home loan might be relatively high when compared to lower interest rates being offered.

Don't be discouraged, work with your Country Home Lending Source to learn how to combat high interest rates including a large down payment to keep the loan small and how to ensure the loan does not impose a prepayment penalty. This allows you to refinance your home loan at lower rate as your credit rating improves.

If you are looking to refinance your current high interest rate, have your Country Home Lending Source mortgage specialist pull your credit scores and your equity position and payment history all at once before discussing your loan options. If you have less than 40 percent equity in your home, it will be much tougher to qualify for a refi. Ask your mortgage specialist to update you on the available home refinance options and help you determine whether or not a refinance is the right move for your current financial situation.

Keeping You Informed
Country Home Lending Source mortgage professionals are dedicated to keeping you informed of the latest market trends and mortgage options. Visit Country Home Lending Source online at http://homeloansokc.com, or call us today at 405-360-1995, to obtain custom loan options designed to fit your needs and help you obtain your home goals.

Call Larry Minson with Old Town, Realtors if you have been thinking about buying or selling a home. You'll receive my 25 years experience in real estate sales and service for central Oklahoma.