Refinancing A House In BK

[banannas]

Can you refinance a house if you are in BK?

[newbie2]

Can you refinance a house if you are in BK?

If it's an FHA or a VA mortgage you can usually do a "streamline" refinance after one year of on time payments to your trustee.

[Flamingo]

Refinancing or any credit move during an active Chapter 13 requires trustee approval. Contact your attorney and go over this with him/her inasmuch as it will need to be determined whether or not you can afford to even do the refinance and all paperwork will have to be submitted to the trustee for review if your attorney approves. This is not an overnight operation...it can take several months especially this time of year due to vacations, holidays, etc.

[TheBKLounge]

Even if you get trustee approval, credit still gets pulled in a streamline; the midde credit score (of 3) needs to be above 620 for FHA and VA...and even if it is, there is BK/FC seasoning. If the OP is in a conforming loan, there is really no chance of a refi while in an active BK. The short answer to the OP's question is that it is unlikely. Talk to an Loan Officer at a bank and see.

[holding on]

Refinancing in bk

With this helpful info, let's say you find a lender who approves you for a refi. and let's say that after a long wait period and review by the trustee, they finally approve also. Does this automatically mean an amendment to your 13 plan? Or does trustee approval just mean you go ahead and refinance?

The one reason that's stopped me from going ahead with an attempt to refinace (i'm at 8.9% and a refi to reduce that would be awesome) is that I'm thinking the trustee will want to know what the end result mortgage payment would be. And since a refi would reduce my mortgage payment I can see the trustee want that difference added to the 13 monthly payment. With a little less than 3 years to go in my plan, I'm reluctant to have the trustee looking over my plan yet again.

[walkthaplank]

Refinancing your house now will have a zero net effect on your budget as it is right now meaning that what you no longer pay to the mortgage you pay to the trustee, but you will have a much better rate on your mortgage and lower payment for the life of your loan which will benefit you greatly once you are discharged from your plan.

Unless something has changed drastically in your income or allowable household expenses that might mean the trustee will change your plan beyond just the mortgage payment, why wouldn't you do it?

[holding on]

What you said in the last paragraph. When I filed gas prices were at their highest, I have had 2 4% raise increases, through pitting one cable company against another i've reduced my media and phone expense by $125. So if a trustee approves a refi and its just an amend to the plan to add the difference, I'd go for it. But if this makes the trustee go ok lets look over your whole plan again, that would make me hesitant.

I know I should also factor in getting a good rate now vs what it will be 2 1/2 years, but kinda wanted to get a feel about how the plan is changed also.