Many folks don’t realize they can buy a house or refinance a home mortgage even if they are making payments on a Chapter 13 Bankruptcy or other debt consoldation repayment plan.
The most important factor in that all of your plan payments have been made on time according to the schedule set up by the trustee. You’ll need to be in the plan for at least a year and meet the credit score guidelines for the loan program you are applying for, usually 580 or greater with a five percent down payment.
People who would be a good fit for one of these loans usually want buy out or pay off the Bankruptcy because to reduce their monthly outgoing payment and increase cash flow.
A recent cash out refinance request we had was a loan on a free and clear home to pay off $40,000 left in the Bankruptcy. The bankruptcy plan payment was $1,560 with just under three years left to go in the plan. We were able to approve a $40,000 loan with a payment under $600 per month improving the customer’s cash flow by over $900 per month by paying off the plan early.
Another customer was relocating to Florida and wanted to purchase a home while in a re payment plan. We were able to approve a Hard Money Loan to purchase and close fast. The client continued to make all of their plan payments on time and improve the credit for another two years. Recently they contacted us to refinance the purchase loan into a low interest FHA mortgage. They were able to pay off the high interest note and get enough cash out to add a pool to their recently purchased foreclosure home.
Give us a call or use the contact tab to find out if a home mortgage loan while in or after a Bankruptcy (or any other situation) is possible for you.
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