topic HELOC Question in Mortgage Loans

HELOC Question

auto-tech — Mon, 12 May 2025 16:50:12 GMT

I have a unique somewhat complicated issue.

My situation:

Since filing & discharged a BK7 in 2009, I never reaffirmed my property which was included in the BK7.

I've been paying my mortgage the whole time although it hasn't been reported except once in 2019. A blurp showing my mortgage company Ocwen sold to PHH which was bought by Ocwen in 2019 that shows 3 months of reporting in 2019 & nothing updated since.

I have a 2nd mortgage also with Ocwen now showing as PHH (2nd not reported since BK7) so both 1st & 2nd are with PHH/Ocwen.

Idk how negatively all this will affect me?

So the town shows my property worth is $273k and I owe $127k.

I have an Experian Fico 8 score 683 & Equifax 692, Transunion 670.

I don't have a W-2 job (DW does but her name is not on the property and has maxed out cards so average score=below 600) so I don't think I can use her. I do have regular income (48K) coming into two bank accounts but separate banks although I can give access for income verification for both if needed. My DTI is low only paying on one credit card & an auto loan.

Now after saying all that, Is there anywhere I can get approved for a HELOC in my situation?

TIA

Re: HELOC Question

ShanetheMortgageMan — Mon, 12 May 2025 17:16:16 GMT

With the vast majority of lenders the BK shouldn't impact your ability to qualify for a HELOC any longer. A new HELOC would pay off your existing 2nd mortgage with PHH/OCWEN.

Your ability to qualify for a HELOC would depend on your DTI ratio, credit scores, and equity position (the new total loan balances vs. the value of your home). On the surface it sounds like $48k/year of income would qualify for $127k+ of mortgages but you'd need a loan officer to crunch the numbers for you. Be prepared with the minimum required payments on your credit card and car loan.

What is the source of the $48k/year of income?

Some HELOC lenders will use a specific FICO 8 version and other HELOC lenders will use your mortgage credit scores (5/4/2, which you can also find on your reports from myFICO.com), so when shopping around you should ask what credit score they base their decision on.

Re: HELOC Question

auto-tech — Mon, 12 May 2025 20:43:01 GMT

I know the BK7 isn't an issue anymore. I mentioned it because of the mortgage not reporting which makes my report a little thin I think. Only showing credit cards & one recent auto loan. No history of mortage payements reporting which would've been 27 years of payment history wiped out because of the BK7 filing.

The $48k is a combo of income which is a portion of direct deposits from DW job in one account. Some consistent side hustle income in the other. Together it's $48k after taxes not including other income we have that goes into retirement. I don't have much debt only one credit card under $4k owed.

Re: HELOC Question

ShanetheMortgageMan — Tue, 13 May 2025 07:52:58 GMT

Only your wife can use her income to qualify, which her current scores wouldn't be able to for any HELOC I'm aware of. If you have a 2-year history of your side hustle income then that could potentially be used to qualify, but unsure what portion of the $48k that represents. It's possible it may not be enough. Most HELOC lenders limit your total DTI ratio to anywhere between 43-50% and that's based on your gross income (not net income after income taxes). What percentage of your gross monthly income do all of your debt payments represent?