To refinance or not to refinance

[Sanandlou]

Long time lurker, first time poster. DO NOT roll your eyes while reading.

I am 9 months from being done with my 5 yr plan and its been a long road.
I have a mortgage lender who can get me approved for a fixed rate mtg of 5.375%. FHA, no money down. I am currently in an ARM (wasnt that 13.75% rate fun in 07/08!)

Should I go for it? The IFs are what kind of interest rate will be going on a year from now when i discharge out normally, will my property value gutter due to more foreclosures in my neighborhood? Will the appraisal laws change in April making it tough to "cover" the loan? do i want to pay interest on this debt? My equity just barely covers this loan by the way...

I want to just ride it out and finish what i've started but if the rates go up to 8% I will KICK myself!

My attorney acts like i know what i'm doing and agrees with whatever i say.
I'm old law...
Thanks!

[Sanandlou]

Anybody?

[lrprn]

We haven't had many 13ers attempt a mortgage mod during an active 13 - that's probably why no answers so far.

First question - did your trustee give permission to modify the loan? Second question - will having lower house payments increase your disposable income enough to interest your trustee in modifying your plan and adding in the loan savings to your current Ch 13 payment? (And yes, I admit with only 9 months left, it's unlikely your trustee would do that.)

[Sanandlou]

Thanks for responding lrprn! Feel like I'm meeting a celebrity after all your posts I've read.

Would they modify the plan if I can pay off the balances of all the accounts with the equity? Can I not get a discharge and be done?

My ignorance is showing but as my ARM has fluctuated they have applied the monies to the other accounts. The mortgage is included in the 13. My mtg has been as high as $1248.00 and has now come down to $805.00. I pay $1504 per month. The new payment would be around $700 with all the accounts paid off (70% pay back).


My question I guess is, will the trustee decide that I can pay at 100% even though we went into the 13 for the 70% payback?

[lrprn]

My question I guess is, will the trustee decide that I can pay at 100% even though we went into the 13 for the 70% payback?

I'll answer your question if you'll answer my two questions first

Frankly with only nine months left and so many "if's", why rock the boat now? Finish your plan so you don't add the risk of your trustee taking a great deal of your money to pay off to 100% that would be yours if you just wait nine more months.

If your lender will mod now, chances are good they will mod in nine months to a year too. And you'll still have the extra cash to boot. My $0.02.

[Sanandlou]

Thanks for the $.02. I AM going to wait. What I didnt mention is that since the 3rd year into this thing I have tried to refinance every year only to stop the precedings since I AM getting by and I AM getting $37K in debt behind me.

Double edge sword of Bankruptcy:
Good side: Learning to live within your means and not stacking up credit cards and lines of credit every where....
Bad side: Feeling like a caged rat!

Patience, patience, patience....
Thanks again! You do a great service out on this board....