Re-Fi mortgage ??

[ladyjenn]

We plan in filing BK7 soon. We are kepeing our house/mortgage. We are currently at a 9% interest rate, and I know we can get lower, however coming up with the money for an appraisal has been impossible. My question is, after we file, and are able to save the money for an appraisal, do you think we will be able to re-fi, since the mortgage company won't be involved in the BK at all??

Thanks in advance!
Jenn

[NoMoreCards]

It is my understanding that you can not get a mortgage (a re-fi, is also a mortgage) until you are out of BK for 2 years. I could be wrong, and I am sure the experts will chime in here.

Also, your mortgage MUST be included in the BK, as you are required to list ALL debts and can not legally pick and choose. You have the option of reaffirming, surrendering, or retain and pay, but the bottom line is the mortgage must be included.

If you want your current mortgage refinanced, you would be better off doing this before filing if at all possible.

[ladyjenn]

That is what I was afraid of. I don't want to have to wait another 2 years to get a lower interest rate. And I meant to say that we are retaining the house/ keeping the house. Maybe we will just do it prior to filing then. Thank you so much!
~Jenn

[LadyInTheRed]

coming up with the money for an appraisal has been impossible.

You may not need to come up with money for an appraisal. When I refied, the mortgage company got the appraisal and included the expense in the refi. Paying for it up front is preferable so you don't add to the principal, but it isn't always required.

[ladyjenn]

You may not need to come up with money for an appraisal. When I refied, the mortgage company got the appraisal and included the expense in the refi. Paying for it up front is preferable so you don't add to the principal, but it isn't always required.

Hmmmm.....very interesting. What I would be saving in interest would MORE than cover the cost of the appraisal if we could include it.
We meet a lawyer for the first time today to see if we can even file chapter 7...I am PRAYING we can!

[HHM]

On a practical note...

If you are really in a financial position such that a chapter 7 BK makes sense, the odds of qualifying for a refi are slim. Your debt to income ratios have got to be sky high which will make it very tough to get a mortgage (even if you are still current on payment to all creditors).

Go speak with a mortgage broker, if you must, but I think you need to reorient your expectations, a refi is not likely.

[angles]

Although I have never heard of this happening, there may be an outside chance that the bank will give you a loan. For example, if you owe 100K and the house is only worth 50K, considering foreclosure costs, the bank may get 30-40K back. If you talk to them about reaffirming the loan but at a lower interest rate and amount, say 75K, they might be willing to work with you.

Keep us posted, its an interesting topic.

[ladyjenn]

Here is the situation..

We have a 40 year mortgage. Our interest rate is 9.63

We can now get a 15 year mortgage for only $30 more a month because of how low the interest rates are now. That is all we are looking at doing. I am hoping to do it after we pay the atty off, and before we acutally file.

It is A LOT of money that will be saved, in the case that they will not re-fi after we filed.

[HHM]

Have you been pre-approved for such a loan?

[catleg]

Something does not compute here Ladyjenn.
As HHM says if you're filing ch7 usually it means your credit is bad so you won't qualify for a refi.
Even though it makes perfect sense otherwise, as you said.
I would just adjust my goals and figure on a re-fi at discharge + 2 years.
Besides what could happen is that, at best, you qualify for a re-fi, but for a 30 and not a 15 year loan.
So your payment goes down, exposing income for the BK means test.
Better to keep the high mortgage payment until the BK is done with.

[Depressed]

Here is the situation..

We have a 40 year mortgage. Our interest rate is 9.63

We can now get a 15 year mortgage for only $30 more a month because of how low the interest rates are now. That is all we are looking at doing. I am hoping to do it after we pay the atty off, and before we acutally file.

It is A LOT of money that will be saved, in the case that they will not re-fi after we filed.

Aren't the rates that are being advertised apply to those with stellar credit scores, good income, etc.. Additionally, wouldn't you need a lot of equity in the house to get a refi? I can't imagine that there doing anything close to 90-100% nowadays.

What kind of rates have you personally been qouted? I remember a coworker years back that could only geet down in the 12% range when everyone else was getting 7-8%

[NewPage]

Aren't the rates that are being advertised apply to those with stellar credit scores, good income, etc.. Additionally, wouldn't you need a lot of equity in the house to get a refi? I can't imagine that there doing anything close to 90-100% nowadays.

Yes, banks are tight with money these days. Getting a housing loan is a challenge unless you have stellar credit.

Most of my husband's appraisal orders these days are repos

[ladyjenn]

We are both still in the 700's (FICO) and current on everything. We live without A LOT to be there. Yes our debt to income ratio is ridiculous! We consulted with an atty yesterday and he believes we are an easy case for
BK7. We retained him.
It doesn't make any difference that our credit score is still good, because the truth of the matter is, no one will give us any more credit anyhow, because we have too muchas it is, so it is like having a bad credit score in real life.
As far as our mortgage Co. calling us and informing us of the lower rates now (5%), I am not sure what is on their agenda.....They did tell me the appraisal on the house would be $450, and couldn't be included in the re-fi. Right there is easy money for them. I am sure we will wait and get this BK7 taken care of first, then see what happens, since we are keeping the mortgage and the house.

Thank you all so much for all the help! This forum is great!