I apologize that this is fairly long, but I wanted to give a clear background to my questions at the end. Thanks!
Well today my last Chapter 13 payment is waiting to be picked up by the mailman. No more trips to 7-11 for money orders, thank goodness. Took over 4 years, and I doubled up most of this last one, and I'm just about free. As soon as the last payment posts I have my completed financial course certificate to send my attorney. No credit balances, no student loans, nothing. Ahhhh.
So while the paperwork gets done and I'm waiting on the discharge, I have some planning to do and some thoughts would be appreciated.
I'm 11 years into a mortgage on my condo. It's a VA loan and other than a number of late payments about 5 years back, no problems. I owe about $67,500, and in today's awful market it's worth somewhere between $85k and $95k. I haven't talked to an agent so I don't have a more solid estimate, but there are other very comparable, even identical condos here to go by.
But I need to move, as soon as possible. I don't mind breaking even on the sale if need be, or even bringing a few thousand to the table if absolutely necessary. I'd like to get away with $10k in a perfect world, but it wouldn't be terrible to purchase my next home in this depressed market that we're in, either. You can use VA loans more than once and I don't need to have really any money to close on my next home.
Here's the rub: I'll need around $12-$15k in repairs and upgrades just to sell, and to do that in the reasonable future, I'll need to secure a loan somehow. Problem is I don't really know all that much about loans or credit requirements, and I've never borrowed against my home equity even when that was all the rage.
Now coming fresh out of a Chapter 13 I know I'll have some difficulties. I'm trying to come up with a reasonable course of action to put myself in a position to be granted the needed loan in a year or less, and really try to optimize my credit. I've built up a small savings ($2,000) and can now add about $400 a month to it, and have around $6,000 in my retirement fund if I run into a dire--as in funeral costs dire--crisis.
What is prompting this move is the age and health of my fiance's parents, they're getting up there and we need to be closer. Normally the thing to do would be to save up until the repair money and moving costs were in hand, but that could take 2 years or more.
So, with all of my situation in mind:
1) What kind of loan makes sense? A personal loan from a bank, some kind of refi, cash out equity? I don't know a thing about the differences.
2) Does having home equity make any real difference to lenders, or am I just a FICO score?
3) Is what I'm hoping for unrealistic in a year or less? I see people getting car loans shortly after BK, for considerably more than what I'm looking to borrow.
4) I'm willing to make credit improvement my #1 hobby if it will help accelerate my cause. I'm not a believer in quick fixes and my experience has given me far more financial discipline than I've ever had, but I'm not above doing whatever will help maximize my credit rebuilding process in the shorter term. From my perspective, I've been rebuilding my financial standing for nearly 5 years already.
What I'm really trying to find out from those who have been there is: What would you do if you were me?
Well today my last Chapter 13 payment is waiting to be picked up by the mailman. No more trips to 7-11 for money orders, thank goodness. Took over 4 years, and I doubled up most of this last one, and I'm just about free. As soon as the last payment posts I have my completed financial course certificate to send my attorney. No credit balances, no student loans, nothing. Ahhhh.
So while the paperwork gets done and I'm waiting on the discharge, I have some planning to do and some thoughts would be appreciated.
I'm 11 years into a mortgage on my condo. It's a VA loan and other than a number of late payments about 5 years back, no problems. I owe about $67,500, and in today's awful market it's worth somewhere between $85k and $95k. I haven't talked to an agent so I don't have a more solid estimate, but there are other very comparable, even identical condos here to go by.
But I need to move, as soon as possible. I don't mind breaking even on the sale if need be, or even bringing a few thousand to the table if absolutely necessary. I'd like to get away with $10k in a perfect world, but it wouldn't be terrible to purchase my next home in this depressed market that we're in, either. You can use VA loans more than once and I don't need to have really any money to close on my next home.
Here's the rub: I'll need around $12-$15k in repairs and upgrades just to sell, and to do that in the reasonable future, I'll need to secure a loan somehow. Problem is I don't really know all that much about loans or credit requirements, and I've never borrowed against my home equity even when that was all the rage.
Now coming fresh out of a Chapter 13 I know I'll have some difficulties. I'm trying to come up with a reasonable course of action to put myself in a position to be granted the needed loan in a year or less, and really try to optimize my credit. I've built up a small savings ($2,000) and can now add about $400 a month to it, and have around $6,000 in my retirement fund if I run into a dire--as in funeral costs dire--crisis.
What is prompting this move is the age and health of my fiance's parents, they're getting up there and we need to be closer. Normally the thing to do would be to save up until the repair money and moving costs were in hand, but that could take 2 years or more.
So, with all of my situation in mind:
1) What kind of loan makes sense? A personal loan from a bank, some kind of refi, cash out equity? I don't know a thing about the differences.
2) Does having home equity make any real difference to lenders, or am I just a FICO score?
3) Is what I'm hoping for unrealistic in a year or less? I see people getting car loans shortly after BK, for considerably more than what I'm looking to borrow.
4) I'm willing to make credit improvement my #1 hobby if it will help accelerate my cause. I'm not a believer in quick fixes and my experience has given me far more financial discipline than I've ever had, but I'm not above doing whatever will help maximize my credit rebuilding process in the shorter term. From my perspective, I've been rebuilding my financial standing for nearly 5 years already.
What I'm really trying to find out from those who have been there is: What would you do if you were me?
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