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Home improvement loan with bk7

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notpaul
Regular Contributor

Home improvement loan with bk7

So I may ina month or two be in the very unusual circumstance of coming into a home that is 100% paid off. This house needs some expensive repairs like a roof, and exterior painting, so the repairs will be more than I have in the bank. I had a bk7 discharged a year ago, so I can't get an mortgage for this...and I'm not even sure how FHA would work if the house is paid for already. Is it possible to get some kind of reasonable financing for this as an owner occupant? What about if I rent it out? One issue I'm concerned about is it's in a somewhat limited market not tied to a large city where houses tend to sit on the market sometimes for years. I searched the forums but it seems no one has asked this question before.
6/15 DC BK7, starting EQ FICO score 563

2/16 FICO EQ 661. TU 653, EX 660
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StartingOver10
Moderator Emerita

Re: Home improvement loan with bk7

Any loan tied to your home is a mortgage - even if it is labeled a HELOC (Home Equity Line of Credit)

 

Right now there are lenders that will issue mortgages right away after your Bk discharge. The LTV is lower and the interest rate is higher. Check with mortgage brokers to see if they have these programs. 

Message 2 of 3
ShanetheMortgageMan
Super Contributor

Re: Home improvement loan with bk7

You are typically looking at around 65% LTV with a BK discharged less than 1 year.  At the 1 year mark I've seen guidelines that will allow up to 75%.  At the 2 year mark you can just go FHA assuming the loan amount would be within the county FHA loan limit.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
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