Sometimes prospective clients come in to see me, and one of the most common questions that they have is, if I file Chapter 13, how long will it be before I can refinance my house? Some people have “adjustable rate” mortgages or ARM’s, and they are stuck with 9% or 11% or 13% interest on their mortgages.

Federal Housing Administration (FHA) guidelines provide that if you are in a Chapter 13, you can qualify for an FHA refinance at a reasonable interest rate (currently 6.5%- 6.75%) so long as (1) you’ve been current on your house for 12 months; (2) you have no new “derogs” or derogatory reports on your credit reports (since filing Chapter 13); (3) your credit score is at least 580 (I can help you improve your score); and (4) you need permission to refinance, from the Bankruptcy Court. Following a Chapter 7 Bankruptcy, you are eligible for an FHA loan after 2 years after your discharge.

So, if you are in a Chapter 13, or if you’ve been out of Chapter 7 Bankruptcy now for at least 2 years, and you are “stuck” with a high mortgage interest rate, give my office a call.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization