Refi in a Chap 13?

[grandmasusan]

I had posted earlier and said I was looking to refi out of my 2-28 which will adjust in 6 months. Pmt will increase by 700 and rate will go up to 7.65 from 6.15. I found out today that total costs for doing the refi is going be close to 30k. I have a 14k prepay and owe 9k in property taxes. Plus another 6k to buydown the rate to 6.25. If the refi goes through, then the monthly pmt goes up only 200.

Should I refi and eat the 30k to save myself 200 a month or should I wait till I can refi after being in the plan for 1-2 years? Not sure what my rate would be but I am sure it will be high.

Any help would be greatly appreciated. I can't figure out if its worth doing the refi or if I should just take the adjustments for a year.

[SinkingFast]

I moved your thread to this Section, Grand, because we do have some Mortgage Brokers that post here off and on. You're more likely to get an "Insider's" perspective if one of them sees you question.

Hopefully, you'll get some good answers for your question.

[MTG_BANKER_OH]

I had posted earlier and said I was looking to refi out of my 2-28 which will adjust in 6 months. Pmt will increase by 700 and rate will go up to 7.65 from 6.15. I found out today that total costs for doing the refi is going be close to 30k. I have a 14k prepay and owe 9k in property taxes. Plus another 6k to buydown the rate to 6.25. If the refi goes through, then the monthly pmt goes up only 200.

Should I refi and eat the 30k to save myself 200 a month or should I wait till I can refi after being in the plan for 1-2 years? Not sure what my rate would be but I am sure it will be high.

Any help would be greatly appreciated. I can't figure out if its worth doing the refi or if I should just take the adjustments for a year.

I would not take that Refi at the current rate because that is way too much money to do it. you have to look it from another perspecitve as save $200 a month for a cost of $30k it would take you 150 months to recoup the costs. You may be able to do an FHA loan once the BK is 12 months old. What is your current situation with your credit? A 14k prepay seems pretty high what is your loan amount? I am assuming you did not escrow?

[grandmasusan]

Nick,

My score is in the 640 ish range with perfect credit, just maxed out card limits. I will be filing Bk 13 in the next 90 days and plan to let my vacant rental property go unpaid. So I have the possibility of having both a BK and a Foreclosure on my credit. I figure it may take me 12-24 months of being in the plan to do a refi. Not sure how lenders look pmt history on non owner properties. I am current on my residence.

The loan amount would be 608k with the closing costs, prepay, and taxes. So if I wait a little, I can drop the amt to 572k. I have a 2nd for 143k that is fixed at 10.10 for 30 yrs.

I cannot go through with the refi as it will cost 11k out of pocket and I don't have that to give.

Thank you for your input, I think I just needed someone to tell me that it wasn't a good idea to spend 30k to save 200 a month. At 150 months, that is over 10 years! I will just do my best to handle the adjustments when they come.

[MTG_BANKER_OH]

Nick,

My score is in the 640 ish range with perfect credit, just maxed out card limits. I will be filing Bk 13 in the next 90 days and plan to let my vacant rental property go unpaid. So I have the possibility of having both a BK and a Foreclosure on my credit. I figure it may take me 12-24 months of being in the plan to do a refi. Not sure how lenders look pmt history on non owner properties. I am current on my residence.

The loan amount would be 608k with the closing costs, prepay, and taxes. So if I wait a little, I can drop the amt to 572k. I have a 2nd for 143k that is fixed at 10.10 for 30 yrs.

I cannot go through with the refi as it will cost 11k out of pocket and I don't have that to give.

Thank you for your input, I think I just needed someone to tell me that it wasn't a good idea to spend 30k to save 200 a month. At 150 months, that is over 10 years! I will just do my best to handle the adjustments when they come.

That is not going to be good if your rental property goes into foreclosure. I do not think the CH13 courts will allow that to happen since it is a repayment plan. You can not sell it? You woudl not qualify for an fha loan then because of the loan size and it is going to be tough to get a good rate with a loan of 600k many of the programs out there are for people with loans usually less then $200k but it depends on your area. Where are you located? Can you save the property that you have as a rental?

[grandmasusan]

This is bad, I am getting confused. When I spoke to my BK attorney, he told me to not pay on the rental and do my best to sell it. I have to get rid of it somehow because it puts my secured debt over the limits. He said it would be to my benefit to file after the rental is sold but I could file if I claim the rental is being given back to the lender. So either way, he would make it work. I did receive an offer but its extremely low but because it's a short sale, it won't really matter, right?

[SinkingFast]

A Short Sale will look better on your Credit later than the property going in Foreclosure and/or BK.

You'll have to get your Lender to accept the Short Sale first. But if your Lender cooperates with you, that will be best for you in the long run.

I'd suggest you ask your attny if you can Discharge your underlying responsibility for the deficit balance in BK if you do arrange a Short Sale.