Are you in a Chapter 13 bankruptcy? Currently own a home and have equity? OR - are you renting and wish you could buy before rates rise? If yes, there may be good news for you.
Under current FHA and VA programs, options may be available for homeowners or renters to obtain the home loan financing they are looking for. I’ve specialize in helping borrowers navigate this challenging situation.
For homeowners looking to refinance a current mortgage to better terms, or consolidate a 1st and 2nd mortgage, there also may be options. Many borrowers are also wanting to pay off their Chapter 13 balance in full and look to obtain an early discharge with a cash out refinance. If you have enough equity, you may be able to use it to pay your mortgage debt and applicable interest. For current renters looking to buy and start building equity – there might be a potential program for you too!
Seanna
Severtson
208.618.9547
seanna.severtson@wvbk.com
- You’ll need 2 out of 3 credit scores to be above 580 to get started. Your mortgage credit scores will likely be different than the credit monitoring you use, they could be higher or lower. We also have a very helpful credit simulator to help build a roadmap for future qualification if you don’t qualify today.
- No late payments are allowed on any credit account within 12 months of application. In addition, we have to look back 24 months on installment and mortgage payments and any late payments during this time period could result in a denial of the loan application. For purchase transactions, we will need to verify 12-24 months of rent payments.
- Minimum of 12 months payments made to the trustee. In addition, all plan payments from filing through loan closing must be made within the month due. The exception to this rule is if the trustee or court acknowledges that any missed plan payments were allowed and the Chapter 13 plan is still considered paid as required. This will be case by case.
- There must be 1 month of “post-closing reserves” or in regular terms – one month worth of your new housing payment left, after your loan has closed.
- The bankruptcy court or trustee will need to approve the transaction terms. For refinances that pre-qualify, you will receive a Loan Estimate of terms to send to your bankruptcy attorney to start the approval process. They may require additional documents like the title, payoffs, and an underwriting approval to submit for court approval – refer to your attorney for your district’s specific requirements. For purchase prequalification, most courts require a signed purchase agreement with a specific property address, purchase price, down payment amount, along with estimated loan terms to request approval. Please ask your attorney about the exact process for your area.
Sound intimidating? It’s really not, it is just a process that we take one step at a time. No matter where you are in the country, if you are 12 months or more into a Chapter 13 bankruptcy, then there may be hope to buy or refinance a home. Feel free to reach out with your specific details and I will be happy to discuss your situation in detail. I hope this sheds some positive light on home loans while in Chapter 13 bankruptcy.