You are here:

Real Estate Home Mortgages/Construction Loan After Bankruptcy

Advertisement


Question
My husband and I are currently in Chapter 13 Bankruptcy. We filed 6 months ago and the case was filed in the courts 3 months ago. Although we are having no problem with making our BK payments and our mortgage, we would like to reduce the costs even more. We both have very good jobs and have been at our positions for 20 years. The drop in the economy reduced our income by $10,000 a year for the past 5 years. We are now getting back to the place we once were, but we don't want to find ourselves back into the same situation. We are 15 years from retiring and would like to try to save as much as we can. We would like to sell our house and build our retirement home. We would be drastically downsizing and the loan would be much lower than our currently mortgage. Is this a possibility at this point in the BK or do we need to wait? We would like to do this sooner rather than later, since we will be saving more than $1000 a month. Will we be able to obtain a construction loan? We will try to sell our home in the mean time, but if the home doesn't sell before the construction is completed and we have to settle the building loan, what are our options? Should we try to sell our home first, before building the new home?

Answer
Susi,

Prior to the mortgage meltdown someone in your situation could have been helped by some of the sub-prime lenders, but as you know, that segment of the mortgage industry has disappeared completely.

Unfortunately, you will not be able to obtain any type of mortgage loan while you are still in Chapter 13 bankruptcy. At this point you have to wait until your bankruptcy is discharged before you can consider the various options that will be available to you.

Best wishes,

Eric
About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here

Real Estate Home Mortgages

All Answers


Answers by Expert:


Ask Experts

Volunteer


Eric Forster

Expertise

Did your last mortgage broker or lender trick you into a messy situation which could cost you your home? I've been close to 30 years in the mortgage industry, and I've seen it all. Believe me, it is not pretty. As the owner of a mortgage company I am called frequently to testify as an expert witness in mortgage fraud cases and other cases where lenders did not fully disclose the terms of the loans they were offering to the borrowers. I have seen fraud being committed by borrowers - and by lenders. It's a tough world out there. And by the way - you are invited to visit my website, www.real-estate-expert-witness.net.

Experience

More than 25 years in loan production and underwriting in Southern California.

Organizations
Mortgage Bankers of America (Southern California Chapter)

Publications
Former columnist for AOL Financial Center and the author of a mortgage primer.

Education/Credentials
MBA (Finance)

©2016 About.com. All rights reserved.