Mortgage during final months of Chapter 13

[scht65]

I searched a few threads and was not able to find a clear answer regarding my situation:

I have an opportunity to relocate for my company but have 10 months remaining on my Chapter 13. I own my present home and I am completely up to date with payments outside of plan. I do not think I am upside down on my present home, but will lose quite a bit of my equity on a sale, my company has a "home buy" relo plan so selling my present house won't be a problem but buying my next is my main concern.

Any thoughts?

[justbroke]

If you have kept your credit clean during your Chapter 13, you should have a very decent credit score (>680 middle score). Additionally, you can seek permission through your attorney to purchase a new home. I'm not sure if it is strategically better to wait until your case closes and is discharged, but that's another factor you need to weigh.

Remember, a Chapter 13 doesn't preclude you from getting a new mortgage or even refinancing. In fact, FHA has programs for people in a current Chapter 13. You just need to otherwise qualify for the mortgage and have 1 year of on-time payments in your Chapter 13.

If your company has equitable relocation, then why would you lose any equity?

[scht65]

For the relocation, they look at three comparables and give an offer based on that. My home value has dropped based on the comparable selling prices in my neighborhood so I think that is where I would lose some of my equity. I wouldn't be able to sell it for what I paid for it 6 years ago.

As for my credit score, it is still showing lower that 680 and I have never missed a payment or did anything that would cause a red flag during my BK so I am not sure why it isnt higher? Nothing negative on my credit reports except for the BK

[Flamingo]

In our last year of our Chapter 13 and even after cleaning up our credit reports and having fantastic prior credit, our credit scores were about 650 (today, five years after our discharge, they were 809 just after Christmas). We still qualified for a FHA mortgage to refinance. In your situation, you have several things to weigh out and in the long-run if it is beneficial for you to relocate and take another job then by all means sit down with your attorney and go over your situation. As JustBroke stated, if you have been careful and prudent since day one of your filing and made all Plan payments you should not have that much of a problem. Just be aware that you will be dealing with probably higher interest rates and fees and also be hit with PMI for a FHA mortgage. The PMI can be high so just be forewarned.