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Refinance After Bankruptcy
We live in NC and filed a Chapter 7 bankruptcy on our personal side and a Chapter 11 Bankruptcy on the business side after COVID closed our business. Both my husband and I had upper 700’s for credit before before filing Chapter 7 and Chapter 11 Bankruptcy. Bankruptcy was confirmed in Feb ’21 and final decree was just issued on 11/12/21. We have a home mortgage and HELOC as well as our SBA loan debt repayment that we’d like to roll into one mortgage with a refi. The SBA loan repayment will be repaid by end of 2022 but there is no penalty to repay early if we could refinance. Are we just out of luck with a refi and have to wait 2 years or is there any option to do a refinance now with a decent rate?
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1 Reply
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Given your recent Chapter 7 and Chapter 11 bankruptcies, refinancing can be challenging, as many lenders require a waiting period of 2 years post-discharge for Chapter 7. However, some Non-QM lenders offer more flexible refinancing options, even for borrowers with recent bankruptcies. These loans often come with higher rates, but they may allow you to consolidate your mortgage, HELOC, and SBA loan. There is no waiting period after bankruptcy discharge on non-QM loans. Maximum loan-to-value is between 65% to 90% LTV. The loan-to-value depends on the seasoning of the discharge and the borrower’s credit scores.
You may want to work with a mortgage broker who specializes in Non-QM loans to explore your options now, rather than waiting.