Refinance update

[Kingxray]

Hi all,

About a month ago I posted a question regarding refinancing our house while under Chapter 13 BK. I didn't want to draw any attention to our case, as the trustee had given us such a hard time at the time of filing and has since left us alone. Here's my update:

I spoke to our lawyer and emailed him documents from our mortgage company (including approval, loan terms, etc.). He forwarded this info to the trustee. Within a week, boom! We received a letter from the trustee stating she had no objection to us refinancing! Yahoo! We didn't have to go through the court and she didn't ask that the monthly savings be added to our BK plan! It was so simple, I couldn't believe it. We close on Monday.

This BK has been such a nightmare since it's inception. It was so refreshing to have something finally go our way! If anyone is considering refinancing while in BK, I say give it a try. Maybe you'll get as lucky as we did. I'll be happy to help answer questions for those of you considering this.

Thanks, as always, for you input.

[spidge]

Good for you. Fingers crossed for a smooth closing.

How far into your plan are you?
Were you in a 100 percent payback?

[LadyInTheRed]

Congratulations, Kingxray!

If only I had equity to allow me to refi out of my adjustable rate mortgage. At least for now I am enjoying a 2.75% interest rate.

[Kingxray]

Thanks. Looking forward to it.

Spidge, We are on a 5 year plan and have approx. 20 months left. We are paying back approx. 60%.

Ladyinthered, Equity wasn't an issue in our refi, although we do have to pay PMI for a while. Enjoy the 2.75% ride while you got it!

[zeezee]

Good for you King! Did you work with your current lender? I am afraid to try it since, I have had significant income increases since my filing and now I have only 5 months left to go. I don't know if I want to go through the hassle. Also, I will have an equity issue. I think my home is valued at just about what I owe on it (1st and 2nd combined)...

[Kingxray]

Good for you King! Did you work with your current lender? I am afraid to try it since, I have had significant income increases since my filing and now I have only 5 months left to go. I don't know if I want to go through the hassle. Also, I will have an equity issue. I think my home is valued at just about what I owe on it (1st and 2nd combined)...

It really wasn't much of a hassle at all. We went through our current mortgage company. We don't have any equity either. They offered us a program that did not require an appraisal and no closing costs. The only requirement was a certain credit score and no late fees on your current mortgage. The mortgage company gives you the paperwork to give to the trustee. They told me "It's no big deal, we do this all the time" and they were right! My husband also had an increase of income and that had me really worried but the trustee never mentioned it. The trustee sees our tax returns every year, so she had to be aware of it. Also, it is an FHA loan that requires PMI for a while but so was our last mortgage, so it was no biggie to us.

I can understand with only 5 months to go (good for you BTW), why you may want to wait. I would, however, give your mortgage company a call and explain your situation and see what you qualify for. That way you will be ready to go after you're discharged. Good luck. You're on your way to freedom!