Can you refinance after your Chapter 7 has been discharged?

Answer 1

Especially in todays and the forseeable future credit environment, probably not.

The previous answer was erased as commercial and out of Wiki guidelines;

New mortgage, new debt? Well, real tough - not impossible. Especially with the concerns over subprime lending in todays market (which you by being in/recent BK more than likely would be under most any view). You would have to expect that you would pay a very high interest rate, likely making it something even people with stronger financials and financial ability wouldn't consider...(guess why...the answer - it isn't because of their richness...it's because they don't make foolish decisions...and you should realize right now, if the "richer' can't afford it YOU REALLY CAN'T).

If the BK is still open, make sure you discuss anything your doing with the BK trustee. Entering into a refinance or any financial contract without his explicit approval will end BK protection, and is sometimes prosecuted as fraud. Certainly, if it means you would have less disposable income to use toward your outstanding debt, he would have rightful objections.

And consider....you went BANKRUPT, presumably because you get in more debt to satisfy your wants than you can pay. Simply, you haven't been able to handle finances and the obligations of debt very well.....if you have any problems with paying this, or wanting more on top of it, hopefully you've seen you cannot borrow your way out of debt (or to riches), but be certain even after clearing some obligations in BK, you can sure find yourself in waaay deep again, real quick.

FHA generally will not penalize you. But many fail to understand, that you may not be "penalized" for having gone BK, but that you got yourself to that point, generally by being a bad borrrowor (late payments, excuses, etc) still means your a bad one to lend money to. Yes you can refi with Fha prior to your Chapter 13 being dimissed in some cases. You must go through the court and trustee. They must approve your new debt. Yes, it must make sense (lower rate, payment etc.) so that during your BK you will have more to pay others.

Cashout are functionally impossible, certainly unless you are paying off the C-13 and all prior debts....and have the income to impress the new lender.

You will find an assortment of attractive come on's in many places (some even here and trying to not look commercial). in general, these are all things to take advanatge of the financially suspectible and tired, maybe desperate. They are out to take you. There is no majic...there is no secret hidden thing that banks do...they need you to have veriifyable (not just claimed) income, a reasonable of level of other debts and expenses, leaving more than enough income to pay them back - and a history to show that more than financially, your promise to do so is good. If you don't have those things...then first - your being a bad financial/business person because you may arrange something but will pay more than you should (loansharking - legal or not - is still available). Work on what you need to cure the problem - and you'll find the money you THOUGHT was the problem...it follows.

AnswerThe thought of filing for Chapter 13 bankruptcy is a tough pill to swallow for many homeowners. Many attorneys fail to tell their debtors that they have options beyond filing a BK 13. For many, the Chapter 13 is the best option because it provides a fresh start and freezes interest and penalties. Debtors that have determined the Bankruptcy status is appropriate, can Refinance their mortgage after 36 months and are not required to pay any unsecured debts. 95% of the time this is the best option for the debtor. Under BK law, the unsecured debt is washed on a BK 13 in the same way unsecured debt is washed under a BK 7. Debtors that can pass the means test, can simply refi their mortgage under a foreclosure bailout program and file a Chapter 7 without ever needing to file a 13 and payback the unsecured portion. Many borrowers and attorney are simply unaware of the programs that exsist.

Typically a foreclosure bailout will go to 65-70% LTV (loan to value). With the new laws enacted in October, many attorneys have been encouraging their clients buyout their debt. The way the process works under a tradition Chapter 13 Refinance would be as follows: My credit rehab programs is started with a 2/28 Arm that will payoff the exsisting mortgage and the items rolled into the bankruptcy. My program will lower the debts monthly payment and discharge their bankruptcy upon funding. Many times borrowers are able to take cash out of their home up to 90% LTV. The higher ltv will require a 0x30 rating on the trustees report (12 month history) and a 0x30 rating on their mortgage (12 month history). 80% LTV is allowed up to 2x60 on the mortgage/trustee payment history. There is no limitation on document types. Loans can be stated income stated asset or Fully documented. Obviously the interest rates will be more favorable by documenting income but is not required.

After two years of timely payments to your mortgage the 2/28 ARM can be refinanced to a lower 30 fixed if a fixed is desired. Being dismissed from a BK is precarious situation to be in. However, there are many banks that will allow a mortgage to be protected even if the debtor has been dismissed. As previously discussed, a dismissed BK debtor has the same options available as the debtor that never file a 13. The premise is to protect that mortgage and anything that would affect title to the property. Usually the open unsecured debts can be paid as well. Its very important when refinancing your Chapter 13 that you use a chapter 13 specialist. Chapter 13 buyout are not like a traditional refinance.Many brokers are unfamiliar and inexperienced with Bankruptcy law and the process varies from state to state. i.e Pennsylvania does not require a motion to be filed with the court to get an approval to refinance a BK 13. Accross the bridge its neighbor New Jersey does require a motion and the process takes much longer. Work with a mortgage professional who knows the attorneys and the trustees.

AnswerYes you can refinance after a bankruptcy either Chapter 7 or 13. The rate and/or the ability to refinance depends on several factors:

• your credit score

• the value of your new loan to the value of your home (this would include the payoff for your mortgage, debts, costs of doing the refinance)

• has your b/k been discharged? or if chapter 13 are you trying to buy out?

• is the rate going to help you?

• is it worth it to refinance?

AnswerAbsolutely! If it is dismissed.

Option 2: If it is not dismissed and you have been making your mortgage payments on time, you can get what is called a bk buyout.Your credit score must be at least 520 or above.You must have enough equity in the house to pay off the Chapter 13,

Option 3: If your credit score is 580 or above you dont even have to pay the Bk off again as long as your mortgage history is perfect. You can lower your rate and get cash out to pay off other debts etc.

As the mortgage market has changed, so have the above criteria.

AnswerYou need a mortgage broker pass on the direct lender or bank they will not work with you at this time like a broker will. Make sure he or she has experience in this type of loan they are more difficult to place. Get your merged credit report your broker will know what this is get an idea what your FICO score is the broker should councel you and I do how to increase this score and therefore decrease your rate. Who knows you might be pleasantly suprised that your FICO might be higher than you think. AnswerThere are some banks that may penalize you simply for filing but I work with many investors who will ignore a dismissal.

Answer by a bankruptcy lawyer, not a financial "advisor."

Yes, you may be able to refinance after a discharge in a chapter 13. The new HAMP program will be ending soon, so if you have not gone to a federally approved agency in your area, do it now.

Even if you do not qualify for a HAMP modification, you may be able to refinance. Remember that you no longer have all the other debt that was discharged, and if that gives you a higher asset value to debt ratio, and a few months or a year or two of on-time payments for the mortgage and utilities and other post discharge debts will improve your credit score. If possible join a credit union and move your accounts to it. They are usually more likely to refinance. Watch out for scams. Check any source offering you what seems a deal too good to be true, that it probably is.

Answer 2

Especially in todays credit environment, no. (Of course all credit decisions are in the hands of the lender).

Answer 3

Yes but you will have to wait several years before it is cleared from your credit file.