Looking for a real world assessment of whether or not a re-fi would be possible given the following circumstances:
- Purchased a home in 2008 which was our primary residence for about 10 years.
- Filed CH7 BK (discharged March 2013) due to a combination of job loss and medical bills.
- Purchased a new home in 2017, converted former home to rental.
- Ended up with tenants from hell (long story) and ended up letting former home go in foreclosure.
- Off title on on former property December 2018.
- Credit scores for both my wife and myself are good (720s/730s as per Credit Karma).
- Had an appraisal done (in an attempt to drop PMI) this past February which gave us a value of $394,000.00/LTV of 82.8%.
As I understand it there are certain exceptions for foreclosures that occured AFTER a BK which ours did. What are our chances of getting approved for a re-fi? Not looking to take cash out, simply want to take advantage of lower rates and maybe drop PMI depending on where the value comes in.
@pgtackle2003 wrote:I would first recommend getting your mortgage scores here on myfico. The credit karma scores are meaningless and can vary widely from actual Fico scores. I don't have much experience with BK but some others will chime in. Getting your actual morgage scores for advice is the first step.
Where do I go to get those? Is there a cost? Does it require a hard pull?
@pgtackle2003 wrote:Yes myfico does charge for checking all 3. I personally feel it's well worth it to know exactly what your scores are so there are no surprises as you go through the process.
Thanks-will definitely do that, but I'm hoping that a loan officer will weigh in as well because the foreclosure doesn't actually impact our numerical scores since the mortgage had previously been discharged in bankruptcy. The bank tried to report late payments and our scores dipped correspondingly, but once we sent copies of our discharge to the bank, their attorney, and credit bureaus, they rescinded it and our scores went back up. Regardless, underwriting is still going to see the foreclosure as a public record, so it will factor in somehow.
Mortgage was included and discharged in BK-did not reaffirm after discharge.
@NC_Mtg_Loaner wrote:I am not certain that your non-re-affirmation of the loan in your CH. 7 allows you any recourse from liability of that loan or not---perhaps your BK attorney can answer that for you, but I think FNMA and FREDDIE MAC will prohibit insuring any conventional loans for you for the next 7 years.
If that's the case, then you are likely to be eligible for "just" an FHA loan on this property which is likely to be more expensive in order to refinance it today vs. your current loan for this property you purchased in 2017--especially if your LTV is this close to 80%. If that's the case, you are likely to be better off paying additional principle on that current loan and working with your lender/servicer to have that MI removed when you hit the 80% mark which of course is likely to require an additional appraisal.
Thanks for the feedback. Incidentally, I happened to look at my credit report today and this was in the recent changes:
This is the mortgage account that was included in the CH7 BK. It will be interesting to see how this is viewed by underwriting-I have contacted a broker in my area and laid everything out for him. Waiting to hear back with what he finds after checking our reports on his end.