@luvsandyshores wrote:
I had a Chapter 13 discharge in November. My scores are good, rates are low, and I have a decent amount of equity built up in my house. I'd really like to do a cash-out refi and get some long-delayed maintenance done on my home. But my lender has stopped doing refis and home equity loans during COVID, and the other mortgage guy I contacted said I need to wait 2 years after discharge. Why is this, when I could have refinanced even during my 13 with trustee permission? I can also sell my house and buy another right now if I want to, so why can't I refi? Do I just need to shop around to find someone willing to do it? If so, is it going to be something like a sub-prime lender?
Conventional loans require 2 years post discharge on a chapter 13 but FHA, VA & USDA will allow you to refi right away.
One thing of note, FHA does require the file to be manually underwritten if the discharge of a chapter 13 is less than 2 years old and some lenders/investors have stopped doing manual underwrites or increased the minimum credit score required thanks to COVID.
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