need re-fi advice

[wednesday]

Our BK was discharged in Jan 2006. We purchased our home with an ARM mortgage at 5.125% 6 months prior. We're planning to ride out the low interest rate until approximately Jan 2010 when we 'd be 4 years post-discharge, and 6 months away from an interest rate increase. It can go up as much as two percent.

At this point we are just building our savings, paying as agreed on the mortgage and student loans, and on one car loan (will be paid off this year, we were slightly upside down on it prior to the BK but found it very worthwhile to reaffirm and keep the car).

We will be looking to finance approx 120K on a house valued at approx 200K. Stable employment history, easily enough income to make the payments. In fact without the BK history we'd be a lender's dream at this point.

I guess I'm asking the experts what we can expect at that point. I know nobody can predict future interest rates, but if we went to a lender today under these same circumstances (4 years out from BK, very low debt-to-income ratio) would we get decent rates?

[emoney]

The plan you are on is very good. From my experience I would add one or two bank credit cards, just to boost your FICO score. Before seeking the CC check your credit reports for accuracy at the the major reporting companies.
With a score over 720 you can pick and choose your loan if BK is over two year old.
regards,
emoney

[jal1129]

I agree about getting a cc. I have been told in the past by mortgage lenders its ideal to have 2 lines of revolving credit (credit cards) charged to not more than 1/3 of the limit. In fact I have also been told its very difficult to get a mortgage when you don't have a cc. Sounds like your doing great! Good Luck!

[wednesday]

Are re-fi's looked at differently than a first-time mortgage? I feel like the fact that we've been paying on the mortgage for several years already would pretty much speak for itself, cc or not.

I can't see getting a cc and charging it up and carrying a balance just to raise my credit score.

[wednesday]

Thought about this some more, and I've wanted to get a US Air credit card just for the perks, basically. I travel quite a bit for work, but don't accumulate enoughy miles before they expire to ever get anything for them. Last few times I've flown on US Air, they've been pushing this card. There's a $35 annual fee, but you get 2 "companion passes" a year, round-trip anywhere in the US, for $99 each. That would mean my husband and son could come along on one of my trips to the west coast and we could make a vacation out of it. We haven't done that before now because the cost of two full-price airfares is just too high.

Do you need to actually CARRY a balance though? The interest rate on that card is ridiculous, and the thought of deliberately carrying a cc balance makes me nauseated.

[wednesday]

It turns out I do have an open charge card. It's a Sears card. I always forget I have it. I just saw it in my wallet, they sent me a new one a month ago. It had a zero balance before our BK so it was not included. I just saw it on my credit report too. It shows up as having a 6,000 limit and a $0 balance.

Is this enough or do I need an actual Visa/MC?