Can we get credit line increase on 2nd mortgage after a Chapter 13 discharge?

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My husband and I had to file bankruptcy almost 7 years ago. We successfully completed the Chapter 13 and it was discharged last year(2012) We were NEVER late with the CHap13 reorganization payment or any other payment and have managed to get a few credit cards since then – have manged them quite well – to build our credit up. Currently our credit score is back up to 72 together. We had our home($1100 month payment) and a 2nd mortgage ($44,000 line with a balance of $38,000-$400 month payment) We have both at the same bank and kept them outside of the bankruptcy – never missed a payment! We would like to increase the credit line as I was forced to retire-without an annuity almost 2 years ago and lost my income. We have only 4 years left to pay on the house so the additional equity is more than there – house value $250,000-current balance$56,000-current 2nd mortgage$38,000= $156,000 in equity. Do you think this is possible? Is there anything we should or shouldn’t do to help?


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Congratulations on getting your fiscal life back together. Sounds like you’ve done a lot of things right, including using credit responsibly during and after the repayment period on your chapter 13. Not sure where you come up with a combined credit score of 72, as far as the scoring models lenders use, scores will range from about 300 to 850. Couple of options you could pursue, one would be to ask your current lender about increasing the credit line, another would be to combine the two with a refinance, which would allow you to amortize the loan for 30 years, which would dramatically reduce your monthly payments. Not sure where you are rate wise on your current loans, but possible if you’ve had them for quite a while that you are well above current best execution rates, which are in the 4.75% or so range. Glad to discuss your options if you like, feel free to give me a call at my cell, which is listed on my Mortgage News Daily profile. Hope that helps. Ted

Answered 11 months ago
Ted Rood
1185 6
11 months ago paula cannon said:
 

Ted – Thank you so much for your fast and great response!! I apologize, the credit score is 724 not 72! Sorry. We have a 15 year loan at 3.75% locked and the 2nd mortgage is about ½ at 4% locked and the other ½ 3.75 variable. We would LOVE to increase the credit line and not touch the mortgage as we only have 4 years left. I just wondered what our chances of this are, since the bankruptcy is still on the credit report – since 10/07. Do you help with mortgages? Again, THANK YOU so much for all of your help! P.

11 months ago Ted Rood said:
 

@paula cannon You may well be far enough out of bankruptcy, especially since neither mortgage was included, to either obtain a new home equity line, or perhaps have your present one expanded. I write loans nationally, but deal with first mortgages, not home equity lines. I would suggest asking the bank that holds your second mortgage about their guidelines to see if you qualify there, and, if not (or in addition), ask at any credit union you are a member of. Even if you’re not a member of any credit unions, you could ask one located nearby if you would qualify with them, they should be able to give you an answer without too much difficulty. You have equity, you have satisfactory credit history and scores, and you have time elapsed since you satisfactorily completed the Chapter 13. You probably have more options than you might think. Good luck! Ted

11 months ago paula cannon said:
 

@Ted Rood THANK YOU Ted!! You are awesome!!! We are members of Atlanta Postal Credit Union so I will check with them as well.

11 months ago paula cannon said:
 

:( The bank just said NO! The guy said he would “bug” the underwriters as he thinks we should be a good risk but he only enters the info – he said he could not promise anything and didn’t sound too hopeful. I am trying to talk to our credit union but I don’t hold out much hope. :( ANYONE have ANY ideas or suggestions?? THANK YOU Ted!! I appreciate your info and help!

11 months ago Ted Rood said:
 

@paula cannon Sorry to hear that, would think the credit union might be your best bet. If all else fails, glad to look at combining the two loans and getting you some cash out, know that wasn’t your first preference, but if push comes to shove, it may be an alternative. We can write loans as short as 10 years, and you can certainly pay them off as quickly as you wish. Let me know.

11 months ago paula cannon said:
 

Would love to have more info Ted – how do I get in touch with you if that was your intention? Thank you so much again – you are definitely a “man among men!”

11 months ago Ted Rood said:
 

@paula cannon Hey Paula, Feel free to call my cell at 314-740-0004, or email me at ted_rood@yahoo.com


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