Posted on: 02nd Nov, 2008 01:40 pm
What is the best option and what will result in credit rating to obtain a future mortgage?...1.2 yr into Chapter 13 the mortgage(only 1) is not in it.
Behind on mortgage about 6 months.
Behind two years on property taxes.
We cannot get another loan right now because of credit.
Reasons:Credit card debt, refinanced to ARM to pay off credit card debt, multiple vehicle break downs forcing us deeper into debt(we do not work in same town we live in), high heat and electric bills that took all summer to pay off or they would be shut off.
The house: Needs windows and roof, $5000 street assesment coming, city says sump is draining into sewer system and must be fixed by December 8th 2008, still have a vehicle that needs t get fixed to return borrowed car by November 8th.
Behind on mortgage about 6 months.
Behind two years on property taxes.
We cannot get another loan right now because of credit.
Reasons:Credit card debt, refinanced to ARM to pay off credit card debt, multiple vehicle break downs forcing us deeper into debt(we do not work in same town we live in), high heat and electric bills that took all summer to pay off or they would be shut off.
The house: Needs windows and roof, $5000 street assesment coming, city says sump is draining into sewer system and must be fixed by December 8th 2008, still have a vehicle that needs t get fixed to return borrowed car by November 8th.
I'm not quite sure I am getting the question from your post.....
What is the best option and what will result in credit rating to obtain a future mortgage?
I was stating facts from my situation to keep from going into a long drawn out explanation.
I was stating facts from my situation to keep from going into a long drawn out explanation.
Being behind 6 months on your mortgage is technically a foreclosure from a new mortgage lenders point of view. Since your situation isn't due to extenuating circumstances you'd need to wait 3 years from the foreclosure date in order to obtain new mortgage financing... and because you are perpetually in foreclosure the only way to establish that date would be to sell the home or catch up on your mortgage payments (technically you'd just need to catch up so you'd only be behind by 2 payments).
How much do you owe on the home and how much could you sell the home for? If you have sufficient equity then one way to eliminate a lot of your debt would be to sell your home - you'd pay off the mortgage, pay off the property taxes, pay off your utility bills, and be able to start over new (somewhat). You could sell your home to an investor or someone buying with an FHA 203k rehab loan where they'd be able to finance the repairs for the sump pump, windows, and roof (if windows & roof absolutely need it).
If you can't sell the home and/or want to hold onto the home... then the first step is to address the reasons why you are upside down on so much debt. It appears it's due to high energy costs & perhaps a broken down car - is that right? Since it's going to be winter soon can you just bundle up all of the time instead of using the heater? Can you trade the car in for a reliable Honda or Toyota? When the temp. is down less car problems happen too.
The next item you'd want to do is contact your mortgage lender. Explain the situation that you are in, be in communication or they most likely will start foreclosure proceedings at some point. Then you want to contact the city to see about an extension on the sump pump, because honestly that should be your main concern once everything else is taken care of - the last thing you want is a sump pump backing up into your home or leaking under your house. If your windows aren't broken and roof keeps the rain from hitting you on the head, those things can wait.
How much do you owe on the home and how much could you sell the home for? If you have sufficient equity then one way to eliminate a lot of your debt would be to sell your home - you'd pay off the mortgage, pay off the property taxes, pay off your utility bills, and be able to start over new (somewhat). You could sell your home to an investor or someone buying with an FHA 203k rehab loan where they'd be able to finance the repairs for the sump pump, windows, and roof (if windows & roof absolutely need it).
If you can't sell the home and/or want to hold onto the home... then the first step is to address the reasons why you are upside down on so much debt. It appears it's due to high energy costs & perhaps a broken down car - is that right? Since it's going to be winter soon can you just bundle up all of the time instead of using the heater? Can you trade the car in for a reliable Honda or Toyota? When the temp. is down less car problems happen too.
The next item you'd want to do is contact your mortgage lender. Explain the situation that you are in, be in communication or they most likely will start foreclosure proceedings at some point. Then you want to contact the city to see about an extension on the sump pump, because honestly that should be your main concern once everything else is taken care of - the last thing you want is a sump pump backing up into your home or leaking under your house. If your windows aren't broken and roof keeps the rain from hitting you on the head, those things can wait.
Hi mdneff!
I think the lender will foreclose the property. You can declare Chapter 13 bankruptcy and save your property. In this type of bankruptcy, the lender will give you an easier plan so that you will be able to pay off the loan within a period of 3-5 years.
If you do not want to save your property, you can then go in for either short sale or deed-in-lieu foreclosure. Each one of this will hamper your credit rating. To improve your credit rating, you can get some useful tips in the given link. Have a look:
http://www.mortgagefit.com/credit-rating/credit-repair.html
Thanks
I think the lender will foreclose the property. You can declare Chapter 13 bankruptcy and save your property. In this type of bankruptcy, the lender will give you an easier plan so that you will be able to pay off the loan within a period of 3-5 years.
If you do not want to save your property, you can then go in for either short sale or deed-in-lieu foreclosure. Each one of this will hamper your credit rating. To improve your credit rating, you can get some useful tips in the given link. Have a look:
http://www.mortgagefit.com/credit-rating/credit-repair.html
Thanks
I am in a Chapter 13 and currently paying on this monthly. My location gets below zero in the winter. Getting another car may be difficult due to the cost of a Honda or Toyota in my area and now everyone wants one. I did have a look into the credit repair and now know what to do to help our credit.
I believe a deed-in-lieu forclosure may be my direction. With me already currently in a Chapter 13 from 1 year ago, do you think the bad rating from the deed-in-lieu and the rating from the ch13 be a wash? I still have 2 yrs at least to go in the ch13. Do lenders only look at the score or do they also look at the ability to pay? What will take precedence over what? Right now my score is 568 and my spouse is 638. I think after using what I have learned in the credit repair section, I could possibly boost both 100 or better. I do have a lot of falsely reported credit issues.
I believe a deed-in-lieu forclosure may be my direction. With me already currently in a Chapter 13 from 1 year ago, do you think the bad rating from the deed-in-lieu and the rating from the ch13 be a wash? I still have 2 yrs at least to go in the ch13. Do lenders only look at the score or do they also look at the ability to pay? What will take precedence over what? Right now my score is 568 and my spouse is 638. I think after using what I have learned in the credit repair section, I could possibly boost both 100 or better. I do have a lot of falsely reported credit issues.
Foreclosure or deed-in-lieu will trump everything - would need to wait 3 years from that date. Plus the fact that you'd have a foreclosure or deed-in-lieu after a BK isn't going to look good either. It won't "wash" each other out - it'll actually "compound" the problem with the BK from a new mortgage lenders point of view.