Refinance......or not??

[dragonnfly]

We filed BK in April of 08, discharged Aug 08. We reaffirmed our house and the two mortgages we have. One is throught BofA and is a ARM but it is based on 1 yr treasury bills, so our intrest rate on that right now is 3.25% thats loan balance is 136,000. We also have a horrible loan through Wells Fargo that is for 35000. and it is 15%!! At least it is fixed but that rate sucks. It has taken us 1 year and 8 months to get caught up. So we have late payments on our credit up until jan of this year. With the now on time payments my score through transunion is 692, hubbies is 684. Think we can refinance the whole mess? or at least the Wells loan? I would be willing to give up the 3.25% for a fixed 5-6.5%. That loan only adjust every 2 years though so it is 3.25 until 8/2011. So maybe just refi the Wells?? I dont know if anyone would be willing to do that. Whats your opinion??

[AngelinaCatHub]

Well, 'Dragonfly', you have been around for some time. You know this answer. This is mostly why we do not as a norm, recommend reaffirmation of any thing. You are stuck with this mortgage and have no way out but to pay or if you are able to, refi.

It is tough now to do so, and in that you have a bk on your record, could be tougher. At least, you have a mortgage so you are no worse off. If you do not try, you know the answer is NO. If you attempt you have a 50/50 chance. I sure do hope you can pull it off, but go for it.

GBWY. 'Hub

[dragonnfly]

We were keeping the house, and the wells was 12.95% and was a arm, so when they offered to refinance at a fixed rate, even thought it was a really bad rate, we took it because at least its a predictable payment. Trying to get back on track we didn't want any suprises coming up with jumping payments. Our intention was to get everything caught up, wait 2 years and refi. 2 Years wont be until Jan 2012. When I saw my credit score was up to 694 I go my hopes up.

[AngelinaCatHub]

We were keeping the house, and the wells was 12.95% and was a arm, so when they offered to refinance at a fixed rate, even thought it was a really bad rate, we took it because at least its a predictable payment. Trying to get back on track we didn't want any suprises coming up with jumping payments. Our intention was to get everything caught up, wait 2 years and refi. 2 Years wont be until Jan 2012. When I saw my credit score was up to 694 I go my hopes up.

A good concept, yes. At least freeze that mortgage. When you refi of course, it is the same as reaffirmation and cannot be discharged.

Things are getting tougher for us and we are relatively bill free. Out of my pittance of SS I have to pay $400 a month. Electricity has gone out of site and I am at least one payment behind as I can only afford to pay one amount but with the heat wave we have had and are having, it has doubled. It is not healthy to survive without air conditioning. I fear the new taxes once they start up big time.

This is why I don't suggest reaffirmation as things can change.

As far as refi that low A.R.M. I would hold off till you actually find out the new rate. It may be even lower by then due to deflation. Yes deflation comes before inflation. A correction factor and we will see both.

I forgot, did you have a C7? Have you heard what a C20 is? If you had a C7 you can still go for a C13 (called a C20 when you do) and get your payments adjusted to a reasonable rate and even discharge "some" more debt. If you have the Nolo book, C7 it explains a bit about a back to back 7 and 13. 'Hub

[AngelinaCatHub]

Here is a good link explaining the C20 advantages and disadvantages.

http://thismatter.com/money/credit/bankruptcy/chapter-20.htm

Hope it helps. 'Hub

[StartingOver08]

You will have a difficult time refinancing because you have recent late payments (within 12 months) plus a bankruptcy.

Are you upside down in your house or do you have equity? What are the loan amounts and the actual current market value?

[dragonnfly]

Thats why we were going to wait 2 years from when we caught up, because of the late payments, is it only 1 year they look back?? We wouldn't qualify for ch 13 now and we can afford the payments the way they are, I just dont want to continue paying 15% If I can get it lowered. Our house is worth 210,000 Im guessing using zillow, it was appraised for 235,000 4 years ago. We owe 130,000 on the low rate loan, and 40,000 on the Wells. So it would be $40,000 we would like to refi. I might try to find a broker in the area and see what they say. Otherwise i will just have to wait it out til the late payments fall off and maybe the property value comes back up some. Wish us luck!!

[StartingOver08]

Why don't you take a look at bankrate.com too and see how much extra you have to pay on a $40k loan to pay it off much quicker. Now that you don't have that other debt, you may be able to pay down the loan very quickly.

Look at the calculator section. Put in your current terms and then 'play around' with various scenerios (one time lump payment or additional monthly payments). Sometimes even just $100/mth knocks off many years and thereby reduces the total amount of interest. It might actually be preferable to a refi, depending upon the cost of the refi.

[dragonnfly]

Theres not much extra to pay, thats why it took us so long to get caught up. The idea that we pay only $200 less on $40000 then we do on $130000 a month really makes you think. The amount we do pay each month only 40% of it goes to the pricipal. Yes we will start paying more when we get a hospital bill paid off in 3 months. But if we could get that interest down would have been the best. I did talk to someone a few minutes ago. They were not even doing 2nd mortgage refis right now and they did say they want no late payments for one year. I am happy about that I thought it was 2 years. So next January we will give it a shot. Thanks for all you input and info. Dragonnfly

[ladyjenn]

I wonder, since you included the mortgage in the BK, wouldn't your mortgage company re-fi for you? To me, (in my own little mind), they should since they know you aren't obligated to that debt and could walk away any time. At least they would still be getting paid and not have to deal with a forclosure or what not. I guess that isn't how the companies work though....
We are in the same boat. We are filing next month hopefully, and I wanted to get our interest rate down as well. Ours is 9.63% and we extended to a 40 yr, just so we could have $$ to consolidate debt last year. Really regretting that now!!!!! But you do what you think you need to do to get by at the time.
Right before we decided to file Wells Fargo (our mortgage co.) called and said they could get our interest rate down to roughly 5% and make it a 15 yr mortgage for about $30 more a month. I wish we had the extra $450 for the appraisal at that point so we could have done it. I don't know if they will do it once they know we filed. We are and always have been current on the mortgage, and pln to keep the house.....Any thoughts or experience on this anyone?

[Amy26]

They reaffirmed the loan... they cannot walk away.

I wonder, since you included the mortgage in the BK, wouldn't your mortgage company re-fi for you? To me, (in my own little mind), they should since they know you aren't obligated to that debt and could walk away any time. At least they would still be getting paid and not have to deal with a forclosure or what not. I guess that isn't how the companies work though....
We are in the same boat. We are filing next month hopefully, and I wanted to get our interest rate down as well. Ours is 9.63% and we extended to a 40 yr, just so we could have $$ to consolidate debt last year. Really regretting that now!!!!! But you do what you think you need to do to get by at the time.
Right before we decided to file Wells Fargo (our mortgage co.) called and said they could get our interest rate down to roughly 5% and make it a 15 yr mortgage for about $30 more a month. I wish we had the extra $450 for the appraisal at that point so we could have done it. I don't know if they will do it once they know we filed. We are and always have been current on the mortgage, and pln to keep the house.....Any thoughts or experience on this anyone?

[calgirl67]

Who on earth told you to re-affirm your house in you BK? OMG.. what a huge mistake. You are on the hook for it now.

You could have kept your house no problem without re-affirming it.

Good luck.