A Guide to Cash-Out Refinancing After Bankruptcy
Florida homeowners who have filed bankruptcy have a good thing going for them—high property values. Homes in Florida have almost doubled in value in the last six years. If you are thinking about refinancing your Florida home after bankruptcy, you can dip into some of the equity you have accumulated and get cash back at closing.
How Much Cash?
The amount of money that you can get from a cash-out Florida refinance will depend on how much equity your have built in your home. Lenders will also take a look at how much you can afford to pay back every month. With a bankruptcy on your record, you might feel like you already have one strike against you. However, if you can show that you can afford to take on the payments required to pay back the cash you borrow, you won’t hear many objections from lenders.
What Can I Spend the Money On?
Technically, you can spend the money on anything you want. Realistically, you should use the money for something responsible like debt consolidation, home improvements, or college tuition. If you have a trustee assigned to you after bankruptcy, you may need to get permission to get a Florida cash-out refinance and you may also be expected to explain what you intend to spend the money on.
Is Cash-Out Refinancing Safe?
There is nothing dangerous about this form of financing when it is used responsibly. Again, the most important thing is that you can afford to repay any money that you borrowed. The last thing you want to do is run into more financial trouble after filing bankruptcy. If you need the money, get it. Just make sure that you can pay it back. Also, be careful to find the right lender. Often times, predatory lenders target folks like you who have filed bankruptcy. Be smart, do your homework, and get referrals. This way, you can be confident in the person or persons you chose to handle your Florida mortgage refinance.
