5yrs After Ch7, I Want A Heloc On Primary Home Not Reaffirmed

Down_with_Suntrust

LoanSafe Member
Jan 23, 2010
26
0
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House had limited equity in 2012, ch7 discharged Dec. 2012.

Suntrust modified terms in 2011 in house modification. 40yr note currently at 5% fixed with 43k
interest free balloon due at end of 40yr term. No other loans or leins.
Been here 5 more years as a stay and pay.

Balance is 290k , Added a large addition, home is now worth 400k+

Im looking at a 50k line of credit to rehab this and another rental property I own.


Should I be ok with this? I really have no desire to refinance the entire amount, as I never reafirmed the loan.
 

Jzone

LoanSafe Member
Jun 20, 2017
201
26
28
70
House had limited equity in 2012, ch7 discharged Dec. 2012.

Suntrust modified terms in 2011 in house modification. 40yr note currently at 5% fixed with 43k
interest free balloon due at end of 40yr term. No other loans or leins.
Been here 5 more years as a stay and pay.

Balance is 290k , Added a large addition, home is now worth 400k+

Im looking at a 50k line of credit to rehab this and another rental property I own.


Should I be ok with this? I really have no desire to refinance the entire amount, as I never reafirmed the loan.
I filed bankruptcy and discharged in 2012. Have not tried to get line of credit. Not sure, but I would think since you havent reaffirmed, you really dont have any equity in the house. In other words, you are trying to get a line of credit by using a property you are not liable for.

You are current on payments, but not legally responsible for the debt. The only guarantee the bank has on repayment is the lien from the original mortgage. So your original bank or any other bank, would probably hesitate on borrowing you more money.

Why not just refinance? If the house is worth $400k now.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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San Diego, California
www.loansreduced.com
It sounds to me like you have a significant equity position in your home, just as Jzone mentioned - why haven't you tried to refinance? Is it specifically because you never reaffirmed the home and don't want to be liable if something happens? I would think if you lost your job or are looking to sell the home you would just do a regular sale. Most people that I refinance that have homes included in BK actually want to have the mortgage reporting on their credit and don't mind.

Just so you know - it sounds like you would be eligible because you're 4 years past the bk and more than 2 years past the modification. I would at least look into it to see how your payments would be (based on a 30 year amortization of the actual balance) and you can also do a renovation loan instead of a cash out refinance which has better interest rates.

Just a thought if you end up having a hard time getting a HELOC feel free to reach out to me here: [email protected] - we specialize in renovation, non-QM loans and are a Federally licensed bank (FDIC).