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Refinance

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OVERIT
Established Member

Refinance

Bankupcty (Chapter 7) just fell off all 3 reports.  Question, never reaffirmed mortgage but have always paid on time.  Owe about 50K on the home now and its worth close to 400K.  Would it be possible to take out a home equity loan now without every having reaffirmed the mortgage?  Or would I need to refinance and take cash out?  Thanks.

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ShanetheMortgageMan
Super Contributor

Re: Refinance

Home equity loans/line of credits require a certain amount of time since a Ch 7 BK has been discharged, I've seen as little as 4 years and as much as 10 years.  Assuming you've met the seasoning requirement for the home equity loan then even though the mortgage wasn't reaffirmed, as long as you've made your payments on time and the payment history meets the requirements for the home equity loan program you are applying for then it shouldn't be an issue - even if it's no longer reporting on credit (the home equity loan lender can just reach out to your lender and get verification directly, or you can supply a payment history printout from online).

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Message 2 of 3
CreditCrusader
Valued Contributor

Re: Refinance


@ShanetheMortgageMan wrote:

Home equity loans/line of credits require a certain amount of time since a Ch 7 BK has been discharged, I've seen as little as 4 years and as much as 10 years.  Assuming you've met the seasoning requirement for the home equity loan then even though the mortgage wasn't reaffirmed, as long as you've made your payments on time and the payment history meets the requirements for the home equity loan program you are applying for then it shouldn't be an issue - even if it's no longer reporting on credit (the home equity loan lender can just reach out to your lender and get verification directly, or you can supply a payment history printout from online).


That's a bit of a generalization...which I understand is a bit necessary, but we also need people to be aware that this is yet another YMMV area.

 

Home value, FICO scores, established income, and distance between appraised value and amount owed all can trim that time frame considerably. I personally helped a loved one close a HELOC less than 2 years discharged from a BK7...and for 5.5% fixed.

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