Re-Fi 2 3/4 years post Chapter 7?

[Helpful1]

I am hoping someone can give me some insight because I have been getting some conflicting info. We filed a chapter 7 in 2010 and it was discharged October 2010. We had a lot of equity in our home and were never late on the payments so it was exempt from the BK. About one year post BK we looked into refinancing for a lower rate and we were told we had to wait a minimum of 2years. So, a couple of weeks ago we applied for a re-fi cash out with our credit union only to be told we now have to wait a total of 4 years from the discharge date?? From what I understand they use Fannie Mae and they have the 4 year waiting period but FHA is 2 years. They also told me they don't do cash out in Texas which also would have been helpful to know. So, I called a mortgage broker and he told me that "IF" we were able to qualify for a re-fi we would be paying much higher then the 5.675% that we currently have because it would be a subprime loan. I asked about FHA and was told that FHA now requires that you pay PMI for the life of the loan now?? Is that true? He said even if we sold our house we could not qualify for any mortgage until it has been 4 years? Is this just Texas or is this not even true?

We have 50%+ equity, have never been late with our mortgage for over 7 years since we have had it.
It is not FHA, it is backed by Freddic Mac. Our fico scores are ranging from 647-691. We would like to do a cash out re-fi and we live in Texas. Does anyone know if this is remotely possible? If we can't re-fi for a lower rate then we would like to get a home equity line to pay off some medical bills and buy a inexpensive car and to have some cushion in case of an emergency. I am gun shy now and upset that after telling everyone under the sun at my credit union , that I have a very long and positive credit history with, that no one bothered to tell me about the 4 year thing until after a hard pull was done on my credit report. :-( Now I am concerned that my credit score is going to go down as a result of that inquiry. Any feedback or insight would be appreciated!

[tobee43]

sorry to hear about your experience Helpful1, it's something many are and have gone through and is extremely confusing, and frustrating.

the bottomline is not written in any guideline, it unfortunately is up to the lender. most lenders today are even reluctant to lend to those with perfect credit, no bk's or ever late and they still cannot qualify. the lenders have the final say, so whatever is written on the FHA guideline, or the FreddyMac or Sallymae, it means nothing to the lender who is actually giving you the money. while banks have been advised by congress to begin lending they are and have been also given a warning in the same breath, "but to only those that really qualify". who sets those guidelines is anyone's guess. like i have said i have actually seen people with over 800 scores, never filed , never late have the worse time trying to get a refi...also being with their bank over 20 years, plus having a business account with the bank that is very successful. still this bank was hard press to refi their mortgage, they also had equity in their home.

i have seen some people get loans for new mortgages, however, at best only a handful since i have been on this site. i hate to be discouraging, however, you have an extremely difficult task in front of you. i wish you the best of luck and hope it will work out for you. and no, it's not just in texas.

[nc73]

Last I remember you can do a cash out refi in texas but limited to 80% LTV. It is true about FHA. It was pretty recent but I missed the date. Your credit is also a bit low. Even with FHA most banks want 680 middle score. My middle score is 699 and I've gotten approved for a FHA mortgage, just a tad over two years after bk. Every lender I called preapproved me. Don't let people get you down, but in your case it's probably best to wait the 4 years. Not sure you can do fha though, but if you go with a 15 year loan the monthly pmi is almost half that of 30 year.

[Ann]

NC73: When you were approved for a loan after 2 years post bk did you have a mortgage that was included and if so did you reaffirm the loan?