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Can You Get a Cash-Out Mortgage Refinance After Bankruptcy?

Times have been tough for many Michigan residents. The auto industry is on shaky ground and many people have lost their jobs and been forced to file bankruptcy. If you have fallen on hard times yourself and have a bankruptcy in your past, but need cash for college tuition, home improvements, or debt consolidation, you may be able to get a cash-out refinance. Here is a brief summary of how a cash-out mortgage refinance after bankruptcy works in the state of Michigan:

The Loan
Michigan property values have seen price gains in many areas of the state. As property values rise, equity builds. Lenders will allow you to borrow up to 125 percent of this equity, minus the amount of your current mortgage. To find out exactly how much equity you have accumulated over the years, you can have an appraiser come to your home. You can also get an estimate from one of the many Michigan home value calculators located around the web.

Getting Approved
When it comes to getting approved for a Michigan cash-out refinance after bankruptcy, the main thing you should be concerned about is your ability to afford the loan. Anything you borrow will have to be paid back with interest. Federal law prevents lenders from giving you a loan if they know that you can not afford the monthly payments.

Special Considerations
Trustees are often assigned to Michigan bankruptcy cases. If you have a trustee who has been assigned to your case, you may be required to get an okay from this person prior to getting a post-bankruptcy mortgage refinance. After permission has been granted, you will want to take extra care to make sure you find the right lender. This is the only way for a cash-out refinance to truly pay off.