Chapter 7 not reaffirmed, continent on sale?

[cnmhenry]

Hi everyone,

First time poster. We are 6 years post Chapter 7 and we did not reaffirm our mortgage but are pay to stay. We have been pre-approved and through underwriting. My question is, because we did not reaffirm our mortgage but pre-approved, do we need to wait and sell our current house before we make an offer? We don't have a liability on the mortgage but there's still a lien.

[justbroke]

Welcome to BKForum!

It shouldn't matter if you reaffirmed or not. The underwriter (UW) would probably base it on whether you can afford both mortgages at the same time. That means that the other mortgage payment (PITIA) will count as an expense in the calculation of your DTI. Otherwise, they may require you to sell the existing property.

UWs can be interesting people. What a UW likes to look at is your bank statements for the past 60-90 days. This way, the UW can find any undisclosed payments that you are making. They are going to know that you have the home, based on LexisNexis report and/or your disclosure. They are going to see the payments from your bank. Whether or not that specific UW will take issue with excluding the PITIA for the existing home, is too much of a guess.

The best would be to otherwise qualify for both mortgages based on the back-end DTI including both (and your expenses). This is how I purchased a another home. I qualified for both so I didn't need to see one before purchasing another one.

PITIA: principal, interest, taxes, insurance and association dues.