House Refi in Plan?

[NoMoney30]

So, I am just curious... I have an adjustable rate mortgage that is set to adjust next year. I'm about 1.5 years into my 5 year plan. Is it even possible at all to refi a house in the middle of a 13? I know it would require trustee approval but would a lender even touch us? The rates are so low right now and I'm not sure how long they are going to stay that way. My only saving grace would be if they stay low into next year and my ARM adjusts down instead of up. I'm at like 4.75% right now... I know if my payment went down the trustee would probably want more money out of me but I owe over 400k on my house, so I will have my mortgage payment long after the BK is over.

I know my credit score is like 660 right now but not even sure if its worth trying to look into or start a conversation with my attorney?

[sophieanne]

NoMoney30 - I was in an ARM during my 13 plan. At that time the interest rates were dropping. My attorney would send a copy of the rate change (I got it from the bank also) and ask if I wanted to do a Refi..during that time I didn’t want to pay for a Refi especially while the rates were continuing to drop. I did it a few months after discharge. As long as the mortgage shows 12 months of online payments and as long as whoever you deal with can do manual underwriting, you should be able to do a Refi..good luck with whatever you decide. Yay for having completed 1.5 years.

[shipo]

Hey sophieanne, question, did you mean to write, "As long as the mortage shows 12 months of on time payments and as long as..."?

[sophieanne]

shipo - sometimes I type far too fast or sometimes autocorrect overwrites my words...yes I meant on time payments 😃

[flashoflight]

Very few places can do manual underwriting and you better ask about manual underwriting as the very first question to the loan broker. If it's anything other than an absolute yes, then move on. It's gotta be FHA or VA too. You probably want to use a broker that advertises manual underwriting or mortgages for those in bankruptcy.

You want ask your lawyer too. If you have a less than 100% plan and save on the mortgage payment, you will get zero savings until you complete the 13. Your unsecured creditors will thank you for the additional disposable income. But it still may make sense to get into a fixed rate product anyway with no immediate benefit given the low interest rates right now.

[NoMoney30]

Thanks guys, yea I emailed my attorney...they ignored me of course. Haha... however, I believe I'm just going to hold out till my ARM adjusts next year. My ARM is "Treasury Index + 2" and I called Navy Federal to confirm...but assuming the rates stay the way they are right now...or even if they go up a little, my rate is going to go way down. I'm at 4.25% right now and if my ARM was converting today, it would drop my interest rate to 2.25%.

I didn't really care if my trustee took the extra money from me, I just wanted something that would be a great benefit to me down the road since as flashoflight pointed out, the rates are amazing right now.

The question though is if the trustee will bark when my rate does adjust down... I think my mortgage payment would be greatly impacted by a 2% drop in interest rate. It would be nice if I could keep paying the same amount even if it goes down then I could get ahead on it. But I guess we'll see. I didn't hear a peep from the trustee when my escrow balance adjusted... so, I guess we'll just sit back and wait.