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Guest

Hi:
We are in dire straights. We have lived in our home in Charlotte area 15 years. Home is financed with Chase. Never had a late payment, not even 1 day day late on home.
Took out a Home Equity Loan 3 years ago. Never a late payment there either.
All total our bills are killing us. Want to Refi. Balance on home is $85K and Home Equity Loan balance is $35K.
Husband lost job, just got rehired on another but want start till next month. He is a government contactor so makes good money but when the contract stopped the money dried up quickly.
His credit score however is absolutely no help, in the 500's.
My FICO scores are 691 Equifax, 726 Experion, and 686 Trans Union.
Problem is I only gross 33K or so a year.
We applied online for a refi to payoff bills but were told my husband is no help on the loan because of his FICO scores.
With the DTI I am at 90% so I cannot get approved to refi.
The home is worth about $165,000.
Can anyone out there give us an idea of how to refi, payoff the debt and get a loan.
We really need some professional advice.
Thanks

jveenstra · Posted: Tue Sep 29, 2009 12:24 pm Post subject: High DTI

Unfortunately, I can not suggest any help in the mortgage area.

Perhaps the best course of action is to consult an attorney regarding a Chapter 13 bankruptcy plan. With such a plan, none of the debts are forgiven, however, an affordable monthly payment plan is established.

The important thing is that you get to keep the house. Credit will be blemished for several years while the payments are made under the Chapter 13 plan.

Another alternative may be Chapter 7 bankruptcy for all the debts except the mortgages. The debts are discharged and not paid.

Discuss with an attorney the best option for you.

jenkin7 · Posted: Tue Sep 29, 2009 11:01 pm Post subject:

Hi usmc,

Your annual gross income is not enough to get you a refinance loan, even though your fico scores are quite good. You need a co-signer to help you qualify for a loan. With a fico score in the range of 500, he will not be able to co-sign on the loan. Thus, I think you can seek help from any of your relatives or friends and see if they can co-sign with you.

You can also write a hardship letter and request your lender to do a loan modification. This can reduce your monthly mortgage payments and help you afford the loan. The only other option would be to file a chapter 13 bankruptcy and reorganize all your current debts. A chapter 13 is a better option than chapter 7, as you pay off your debts as per a repayment plan over a certain period of time rather than having them discharged.

manoj_gopale · Joined: 16 Feb 2009 Posts: 488 0.00 Dollars($)

usmc1775
welcome to mortgagefit....
As you have said that you haven't missed any payments so I think in this regard you should think about going for the chapter 13 instead of chapter 7 where you will be able to make a good repayment plan without further hampering your credit.(although BK itself will initially hamer your credit).

But In my opinion BK is one of the best option available for you.But keep in mind that you need to choose chapter 13 over chater 7.Help from professional attorney will be an added advantage in this quest.

keep in touch....

Guest

What about going FHA with my husband as the co-x since he has the low FICO but has very good income to lower the DTI ratio?
Would that help in my case?

jenkin7 · Posted: Mon Oct 05, 2009 12:44 am Post subject:

Hi USMC,

If your income is not sufficient to get you approved for a loan, a co-signer can definitely help you. But a co-signer also needs to meet all the qualifying criteria which the main borrower has to, in order to qualify for the loan. FHA requires a borrower or a co-singer to have at east 620 credit scores to qualify for a loan. As your husband has low FICO score, it will be quite difficult for him to qualify for an FHA loan even as a co-signer.

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High DTI, Have Equity, Good FICO