Hi all,
My fiance is getting his Chapter 13 discharge this month, YAY. He wants to get a HELOC to remodel our house so we can sell it before the next market crash. He has about $250,000-300,000 equity in his home and needs to borrow about $75,000.
He is starting the process of shopping around and is finding almost all banks are telling him it's an automatic decline until he is 2-4 years out of Chapter 13. He's a credit union member and they were no help at all. So far he's talked to BofA (4 years), US Bank (5 years), and Citibank (4 years). The credit union said 2 years "or longer."
His EQ score is 634 even with the discharge not yet complete. His chapter 13 payments have been on time, and his mortgage is current. Based on what I've read in the BK threads, once his credit report is cleaned up and everything reporting 0 balances, we think his score could go up at least 50 points.
Can anyone recommend a lender who is open to borrowers with recently discharged BK? Any suggestions for strategy?
Thanks!
I'd keep asking around, vis a vis go right down the list of every CU he is qualified for starters, and anywhere else available too (Schwab has a HELOC of all places for example). HELOC's aren't regulated like conventional / FHA mortgages and as such I suspect every lender is going to have something potentially non-trivially different.
As for strategy I'd simply be exceedingly open and up front about the BK and what the money was going to be used for.
There might be some creative mortgage options for doing a cash-out refi in this situation rather than a HELOC as well, but it wouldn't be conventional or FHA, might be able to fall into soemthing like a asset only mortgage if you have that much equity, I'd assume someone might have a product like that.
