Should I re-affirm / refinance prior to doing any repairs / upgrades?

[Mark80]

I am in a bad / good situation and a bit confused on how to proceed with it. I live in a home that isn't going to be a forever one, where I am stuck for several more years due to my son's school. I am not a fan of the house / neighbors / area. And the amount of money that needs to be put into it is fairly massive (but I have it). So my main question is if I do go ahead and start throwing money at it SHOULD I go ahead and refinance prior? I have this fear at some point that if I renovate and do all of this work that I could lose the house somehow since it wasn't re-affirmed. Or at the very least feel a bit uneasy due to not "owning" it if that makes sense.

Thoughts?

[Zombie13]

First question I have is: how many more payments do you have in your plan?
Second question is: have you prioritized the repairs and updates?
If you have systems that are unusable, those would be priority 1.
For updates, I think it makes sense to wait til you are done with your plan because, this year's hot home interior trends may not be next year's hot home interior trends. You don't want your updates, to look dated, as soon as you put your house on the market (if that is what your planning, that is).
As long as something is working, leave it alone until you get the closing on your bk; then you do whatever you want. You won't have to worry about reaffirming, etc.
As a note: we asked our realtors how much paint and flooring would cost in our home. We are getting an estimate on paint today, but they did say, for paint and flooring, it would be under $15,000. So, Holy S*** that is not what I was expecting. I was thinking more like under $5000 LOL. But we shall see.

[Mark80]

Hi Zombie,

Sorry just noticed your response!

I am not sure what you mean by "how many more payments"?

I made a list of all of the things that NEED repaired, and then a list of what I wanted to upgrade. Since I am still going to be living here for another six years I figured I might as well make the house more enjoyable to live in. Things like fixing up my landscaping, expanding the patio etc. Interior wise a lot of things like the bathrooms need updating and I get what you mean by trends and styles. I do however need to replace my shower.

Oh reading further did you mean payment plan in chapter 13? I filed a chapter seven years ago, and obviously did not re-affirm at that time.

[Zombie13]

Hey Mark80,
No worries.
Sounds like you have a good plan there.
Yes, Barbisi (my wife) pointed out to me that you filed a Ch7; I implicitly assumed you were in an active 13 heh, so my mistake there.
I am not familiar with potential concerns related to re-affirming a mortgage post-ch7. How long ago was the ch7 confirmed by the court? If it has been over 10 years ago the 7 should have dropped from your record. In any case, if you choose to re-affirm, definitely tell the lender about the 7, year filed, status, etc. and ask them if they see any issues with it.
flashoflight may know more about this; they often chime in and offer valuable advice on mortgage/housing issues. And flash - hope it's ok to 'highlight' you like this to direct your attention to the matter.
Also Mark80 - ask yourself which tasks you can do yourself, vs. hiring someone. Handyman types for hire would be lower cost than a plumber for things such as simple plumbing (p-traps, valve replacement) and vanity installation as well. I spent 4 months shoveling and filtering rocky dirt, recovering the dirt for grass planting last year. Saved myself a lot of expense; I estimate 5K (I didn't have 5k anyway) in labor. It was very hard work, but I got it done. If you are doing something like that, let me know; I may be able to send a PM with a photo of my DRS9000 (Dirt Recovery System)... the 'label' is just kind of a joke, a throwback to the 'RonCo' late night TV adverts decades ago... but wait, there's more... you also get... this handy set of ginsu knives! But that's not all... etc. etc. LOL.
Alrighty; good luck with the home updates!

[flashoflight]

I am in a bad / good situation and a bit confused on how to proceed with it. I live in a home that isn't going to be a forever one, where I am stuck for several more years due to my son's school. I am not a fan of the house / neighbors / area. And the amount of money that needs to be put into it is fairly massive (but I have it). So my main question is if I do go ahead and start throwing money at it SHOULD I go ahead and refinance prior? I have this fear at some point that if I renovate and do all of this work that I could lose the house somehow since it wasn't re-affirmed. Or at the very least feel a bit uneasy due to not "owning" it if that makes sense.

Thoughts?

Thanks zombie for the refer. I didn't see this one too.

Is the house in good enough condition with no health and safety issues to survive an FHA appraisal? That's my biggest concern. Sometimes you will get lucky and get a guy that wants to be gone in 20 minutes and give you the same quick look appraisal as conventional financing. If you can do conventional, you can refi easier. FHA can be nitpicky and they look through the photos and report carefully. I hate chapter 7 reaffirmations on a house. If you are gonna reaffirm, it's better to refi like you are planning.

A non-reaffirmed mortgage can be a good thing. Personally I wouldn't refi and become liable if the value is close to the mortgages on the house. The ability to walk away with little consequence is a huge benefit in case there is a housing downturn and you lose your local job.

A post-refi renovation isn't going to come close to giving you 100% back. But maybe the renovations will add enough value to avoid PMI given valuations have gone up a lot over the past two years.

You could go either way. Rates seem to be rising. But on the super long term, rates have been falling for the past 40 years with a few small upswings.

[Mark80]

Thanks for responding and you made a lot of good points. Ya one of my big reasons was to drop the PMI. But to be honest it looks like I NEED to do repairs and upgrades prior to appraisal in order to even do that... that's something I never gave much thought to. I suppose the entire non-affirmed home owning situation and processes are no different. However isn't it harder to sell / get a new loan if you are not affirmed?

[Zombie13]

We did an appraisal at the old place (the train wreck, the money pit, that brought us here); the appraiser mentioned that for refinancing, appraisers need to be more 'critical' in their assessment of the home mortgage. So, keep that in mind.

[Mark80]

I never got a notification... anyhow thank you. Currently fixing things up now, but the entire refinancing thing is out due to interest rates. So if the refinancing can be a bit more touchy, is there some kind of way to go to another mortgage company and BUY the house (aka have them take it over)? I am probably delusional that it could even be a thing though. Who knows when things will improve though mortgage wise anyways.