Refinancing a mortgage after filing for Chapter 13

After filing a Chapter 13 bankruptcy petition and starting on the required repayment plan, some Florida residents may wonder how soon they might be able to apply to refinance the mortgage on their homes. Some people want to do so while they are still in the repayment plan period. For others who have completed it and have had their final discharges, they may want to know how long a period different programs require to elapse before approving refinancing.

During the repayment plan period, any refinancing will need to be approved by the trustee. This is because refinancing is considered to be taking on additional debt, despite the fact that it is only replacing the old mortgage with a new one. If a person is able to gain the approval of the bankruptcy trustee overseeing the case along with a lender, it is possible.

After a Chapter 13 bankruptcy discharge, Fannie Mae and Freddie Mac both require that a minimum of two years must have passed since the discharge was granted in cases in which the bankruptcy was not through financial mismanagement or other fault of the debtor’s. In other cases, both programs require four years to pass. HUD and FHA both allow easier approvals for refinancing after Chapter 13 bankruptcy, with programs allowing people to do so after a year has elapsed post-discharge.

Bankruptcy can provide a person with a fresh financial start, and Chapter 13 can provide a way for a homeowner to catch up on past-due mortgage payments in order to remain current and keep the home. This chapter is designed for people who have a regular source of income, and a lawyer can outline the other eligibility requirements.