Post BK13 Questions

[Horseshoez]

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@tooleman694 wrote:

From what I understand, after discharge there is no FHA waiting period however there is for conventional. My situation was crappy because I included my house in my BK13 and lenders look at it as a foreclosure. I can't get a conventional for years.

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Sorry, unfortunately the 2-year waiting period for an FHA mortgage is true, regardless of whether the discharge was for a Chapter 7 or a Chapter 13.  If you don't believe me, you can download the FHA rule book and see for yourself.  Like you I too had been led to believe the waiting period was for only Chapter 7 discharges, but the rule book is quite specific.

[tooleman694]

Which sounds crazy to me because you can get an FHA loan while in BK13. But have to wait 2 years after discharge. What the heck.

[Horseshoez]

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@tooleman694 wrote:

Which sounds crazy to me because you can get an FHA loan while in BK13. But have to wait 2 years after discharge. What the heck.

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Well, yes and no; while you can get an FHA mortgage during a Chapter 13, it is only with Trustee approval, and mostly for hardship cases.  For the rest of us, you absolutely cannot get an FHA mortgage without extenuating circumstances until 2-years have passed.

[AllZero]

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@Anonymous wrote:

OP, regarding scores - disregard Credit Karma scores altogether. They aren't used by lenders. You need your FICO scores, specifically the mortgage variants. I'll put up the bat signal for @AllZero as he has a link to a source of free mortgage scores.

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👍🦇

Free or $1 you can obtain your 3 bureau FICO 8 scores and reports at Experian or CreditCheckTotal (part of Experian). Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.

AnnualCreditReport. Free weekly 3 bureau online reports through April 2021.

Free credit reports (disregard the VantageScore 3.0 score) at:
Credit Karma for weekly TU and EQ reports.
WalletHub for daily TU report.

[AllZero]

Free mortgage scores

EX2 + 3 Bureau scores and reports for free or $1 at Experian or CreditCheckTotal (part of Experian). Cancel in 7 days or less to avoid the reoccurring charge.

TU4 WyHy quarterly score. Not sure on membership requirement. Maybe hard pull TU?

EQ5 Get a savings account with DCU. Soft pull EQ to be a member. Free monthly score.

You can also obtain your 3 bureau mortgage scores at FICO Advanced . Cancel plan after you obtain your scores and reports to avoid re-occurring monthly charge.

[SB_F]

On BK13, you might as well set yourself up to get a conventional mortgage at 24 mo after discharge, whether it is a refi or a new house. That will give you the best rates and no PMI w/ 20 % down. Plus you will have a lot more places to apply. My BK13 was filed Nov 2013, but due to trustee arguments (that he eventually lost), I wasn't discharged until until July 2019, seven months after plan was paid (so I was the one that really lost). So now I have to wait until July 2021 to apply to get the best rate. My mortgage was paid outside of BK and was sold several times ending up with NewRez. NewRez sends me emails several times a week encouraging me to refi with them. When I call, the agent says oh yeah, you are definitely eligible now. I say please verify, and a few days later they come back with oh sorry, we have to wait until two years post discharge ...

My mortage pmt is just a little bit bigger than yours, and my house has gone up a similar amount. After doing the math, it made sense for me to keep paying my higher rate (5.75%) rather than paying all of the closing costs only to need to refi again in July 2021. I've just been focusing on rebuilding, so I'll be ready when the day comes to pull the trigger.

If you want to refi or buy before then and don't want to sign over house to GF with no recourse (at least in my state and my bank), I would go with someone like People's Bank & Mortgage or similar where they make BK involved loans and hold them in house. I would get the loan with the least closing costs or even no closing costs (rolled into a higher rate). Then when you reach two years post discharge, you can refi without losing the closing costs. Do the math every way possible.

Good luck!