Adjustable Rate Mortgage vs. Bankrucptcy

garisworld · Joined: 19 Jul 2007 Posts: 3 1.88 Dollars($)

I am behind on my mortgage because my ARM keeps going up. I am not able to refinance my mortgage at this time due to poor credit score. Is there a mortgage lender out there that works with individuals, that has poor credit score, to help them refinance or is filing for chp 7 or chp 13 my only option?

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

Hi Garis,

There are many lenders who would be willing to refinance even if your score is not good. But how low is it?

You should not be considering filing bankruptcy right now.

How much is the balance left on this arm and is there any equity in the house?

Miller

Guest 0.10 Dollars($)

well my score has dropped tremendously since i havent been able to keep up with the rising adjustable rate. it is currently at an embarrassing 489. As for how much is left on the ARM, I'm not quite sure. I have spoken to Chase (my mortgage company) about refinancing however, they told me they are unable to assist me, due to my low credit score. I am already behind on my mortgage payment and by september 2007 there is another increase of 3% which will almost double my original payment. I am basically stuck unless i can find a lender who can refinance my mtg. My current equity in my house is aprox. $25K.

Samantha

Hi Garis,

Welcome to our forums.

I can understand that you're in a tough situation but please do not feel embarrassed. It happens at times when things do not work out the way we want. But we need to be positive and make things happen for us.

Considering your score, well, it's low no doubt. But then you should try shopping with some lenders and at least find out what they're asking for. What kind of scores do they require you to have and what fees and rates they are charging you. Even if they offer a refinance loan, the rates would be higher compared to what you could get had your credit score been better. But you need to find this out; until and unless you talk to a few more lenders, you should not be convinced that you wont get a poor credit refinance loan.

Now, as far as getting any kind of support or help from the mortgage company is concerned, you should try once again to update them about your situation and request them to suspend the payments for at least a few months. This will give you some time to gather the required funds to become current on the loan. And, if you do not have sufficient savings, then if possible take up a part time job or a freelancing job so that you can gather some cash to pay off your loan.

Hope this helps..

God bless you.

Samantha

Guest 0.10 Dollars($)

Hi garis,

Which state are you in?

garisworld · Joined: 19 Jul 2007 Posts: 3 1.88 Dollars($)

I am in Georgia. I spoke to an attorney she suggested I file for chp 7 and surrender my home to the mortgage company. any suggestions??

blue · Posted: Wed Jul 25, 2007 1:18 pm Post subject:

Hi Garis,

I don't think that would be the best advice for your situation.

Refinance into a fixed rate mortgage, be it for somewhat higher rate right now and after a couple of years when your score improves you can look for some other options to lower the interest rate.

As you have still equity in the house some lenders would be interested in refinancing your loan. You need to contact a few more and it is likely that some of them will agree. But try to pay off the lates to improve your chances.

Thanks
Blue

carnahandavid · Joined: 21 Dec 2006 Posts: 239 58.40 Dollars($)

Guest 0.10 Dollars($)

"I am in Georgia. I spoke to an attorney she suggested I file for chp 7 and surrender my home to the mortgage company. any suggestions??"

Filing bankruptcy won't help. It will bring down your score even further. Plus it would become difficult to qualify for loans for some years.

If there are 1 or 2 defaults, Chase will consider your situation and help you bring the loan current. You do not have to give home ownership to Chase right now.

Samantha

Hi Garis,

Did you have a talk with other lenders in the market? Try getting a loan from any of them and if this does not work out, then consider a deed-in-lieu if leaving the home isn't a concern for you. Why would you file a bankruptcy to surrender your home? And, by the way, even if a person files for bankruptcy, it's not always that he will be losing his home. There are state exemption laws which prevent a person from losing his home after filing bankruptcy.

However, I am not sure as to why the attorney advised you to file bankruptcy. But personally I feel you should consider a deed-in-lieu which will not affect your credit as much as a bankruptcy will. But if Chase is not willing to co-operate, then we'll have to find some other solution. By the way, did you ever talk to Chase about deed-in-lieu?

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