Selling And Buying A House While In Chapter 13 Bankruptcy
This Article Is About Selling And Buying A House While In Chapter 13 Bankruptcy:
Selling And Buying A House While In Chapter 13 Bankruptcy is allowed with trustee approval. The bankruptcy trustee is more than willing to sign off on a home sale and purchase during the Chapter 13 Bankruptcy repayment period. As long as it makes financial sense and the homeowner/homebuyer is able to make timely payments, the trustee will never object on the person getting approved for a mortgage. So what does as long as it makes financial sense mean? People in Chapter 13 Bankruptcy repayment plan should not be buying mansion or home that is well above their financial means. However, trustees will approve a home sale and a new home purchase due to a growing family, job relocation, or downsizing.
Gustan Cho Associates have helped thousands of borrowers qualify for a mortgage during Chapter 13 Bankruptcy repayment plan and has never run into a situation where a bankruptcy trustee did not approve a home purchase or refinance transaction. FHA and VA loans are the only two mortgage loan programs that allow borrowers qualify for a mortgage while in Chapter 13 Bankruptcy repayment plan. There are many instances existing homeowners need to sell and buy a new home while in Chapter 13 Bankruptcy repayment plan. In this article, we will discuss and cover. Selling And Buying A House While In Chapter 13 Bankruptcy.
Keeping And Reaffirming Mortgage When Filing For Bankruptcy
Homeowners can keep their homes when filing for bankruptcy. There are two types of bankruptcy: Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 Bankruptcy is also referred to as total asset liquidation bankruptcy. What this means is bankruptcy petitioners will surrender all assets with the exception of exempt assets to the bankruptcy courts so the assigned bankruptcy trustee can liquidate the assets and pay the creditors with the proceeds of the sale. However, there are certain assets that petitioners can decide to keep such as an owner-occupant home, car, and certain amount of assets. Petitioners who own a home with a mortgage can have the option to keep their home and reaffirm their mortgage when filing bankruptcy. Reaffirming the mortgage means the homeowner can keep their home outside of the bankruptcy and make timely payments on their current mortgage. This also holds true with Chapter 13 Bankruptcy.
Homeowners who are not restructuring their mortgage loan can reaffirm their current mortgage and leave the mortgage loan outside of their Chapter 13 Bankruptcy. Petitioners need to keep on making timely monthly mortgage payments on reaffirmed mortgages outside of bankruptcy. On Chapter 13 Bankruptcy, the consumer is under the supervision of the bankruptcy trustee for the repayment period of the Chapter 13 Bankruptcy. Chapter 13 Bankruptcy repayment is normally for either three or five years. During the three or five year repayment period on Chapter 13 Bankruptcy, the consumer is under the strict supervision of the assigned bankruptcy trustee. The trustee needs to be notified and approve any and large financial transactions such as a home sale and/or home purchase. Three to five years is a long period of time. Existing homeowners who have reaffirmed their mortgages during Chapter 13 Bankruptcy repayment plan can sell their current home and purchase a new home during Chapter 13 Bankruptcy repayment plan without the bankruptcy being discharged.
Qualifying For A Mortgage When Buying A New Home While In Chapter 13 Bankruptcy
Many people including bankruptcy attorneys do not realize that people can qualify for a mortgage while they are in an active Chapter 13 Bankruptcy. The bankruptcy does not need to be discharged. Many automatically just assume they cannot qualify for a mortgage until the Chapter 13 Bankruptcy has been discharged and their credit needs to be rebuilt and reestablished. This is not true. Borrowers can qualify for a mortgage during Chapter 13 Bankruptcy repayment plan without the bankruptcy being discharged. Only FHA and VA loans allow borrowers to qualify for a mortgage while in Chapter 13 Bankruptcy repayment plan.
Both HUD and VA Agency Guidelines in qualifying for a mortgage while in Chapter 13 Bankruptcy repayment plan are exactly the same. To become eligible, borrowers need to be in the Chapter 13 Bankruptcy payment plan for at least 12 months with timely payments. Mortgage borrowers cannot have any late payments while in Chapter 13 Bankruptcy repayment plan. It needs to be a manual underwrite. Not all lenders will do manual underwriting on FHA and VA loans. Gustan Cho Associates are experts in manual underwriting on FHA and VA loans. GCA Mortgage has a national reputation of not having any lender overlays on government and conventional loans. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify for a mortgage at other mortgage companies. The team at GCA Mortgage are experts in helping borrowers get approved for a mortgage while in a Chapter 13 Bankruptcy repayment plan.
Can I Sell My House While In A Chapter 13 Bankruptcy?
There are many reasons why homeowners may need to sell their current home and purchase another home. It can be because they either need to upgrade to a large home or downgrade to a smaller house. Most repayment plans on Chapter 13 Bankruptcy is 60 months which is a long time. Home prices have skyrocketed during the past two years. Many homeowners are sitting on a home that is valued higher than they ever dreamed of. With the combination of a housing shortage and historic record low mortgage rates, many homeowners with a larger home that need to downsize can sell their current home, pay the outstanding balance on their Chapter 13 Bankruptcy and purchase another home.
Lately, we have a flood of homeowners who are inquiring about doing a cash-out refinance and paying off the Chapter 13 Bankruptcy so they no longer have to be under the supervision of the bankruptcy trustee. Other homeowners with small children need a larger home so they need to sell their current home and purchase a larger home. Upgrading, downgrading to a smaller home, or doing a cash-out refinance mortgage and paying the outstanding Chapter 13 balance all can be done with FHA and/or VA loans. Please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response if you need to qualify for a mortgage or have any questions. You can also email us at [email protected] The team at Gustan Cho Associates has a national reputation for being a mortgage company licensed in multiple states with no lender overlays on government and conventional loans. GCA Mortgage has dozens of lending relationships with non-QM and alternative mortgage lenders. We have every loan program homebuyers are looking for. Gustan Cho Associates is known as a one stop lending shop since we are both mortgage bankers and are able to broker mortgages that we cannot bank. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.