This blog will cover the Texas Chapter 13 cash-out refinance mortgage guidelines on VA loans. Homeowners can qualify for FHA and VA loans during and after Chapter 13 Bankruptcy. Dale Elenteny of GCA Mortgage Group is a Texas Chapter 13 cash-out refinance loan expert. Here is what Dale Elenteny had to say:
Texas has a special rule and law. It is a state-specific law regarding the Texas Chapter 13 cash-out refinance guidelines. You cannot do a cash-out refinance mortgage in Texas on government loans. You can do cash-out refinance mortgages with conventional, portfolio, and non-QM loans.
Homeowners cannot do a 100% cash-out refinance on VA loans in Texas. Texas Chapter 13 cash-out refinance on VA loans is not allowed, creating homeowners in an active Chapter 13 Bankruptcy who want to do a Chapter 13 Bankruptcy Buyout. The following paragraphs cover the Texas Chapter 13 cash-out refinance on VA loans.
Chapter 13 Bankruptcy Mortgage Guidelines on FHA and VA Loans
Homebuyers and homeowners can qualify for an FHA or VA loan in Chapter 13 one year after entering the repayment plan. Regarding the BK Chapter 13 bankruptcy, borrowers will be eligible for a home purchase or rate and term VA or FHA loan after twelve months under a payment plan with bankruptcy judge approval or the plan is completed. Mike Gracz of GCA Mortgage Group explains Texas Chapter 13 cash-out refinance mortgage guidelines as follows:
Borrowers can do a rate and term refinance on VA loans in Texas. VA loans in Texas and do a Chapter 13 Bankruptcy buyout.
VA does not have a true rate in term loans other than its IRRRL, which is the payoff of an existing VA loan with no cash back. VA considers all other refinance as cash-out, even though the borrower does not receive cash. In Texas, VA will not allow cash back on a cash-out refinance. However, they can use the cash-out program to pay off an existing lien or mortgage if they do not receive any cash in hand. Therefore, the loan must meet the cash-out refinance requirements.
Texas Chapter 13 Cash-Out Refinance Guidelines To Pay Off Existing Lien or Mortgage
Seasoning:
The note date for all refinance loans must be on or after the later of 210 days after the first monthly payment was made on the mortgage being refinanced. Dale Elenteny of GCA Mortgage Group said the following about modified loans in Texas:
On modified loans, the seasoning must be measured from the first payment date due date listed on the modification agreement, not from the first payment due date of the original loan). The date on which six full monthly payments have been made on the mortgage being refinanced. The borrower may not prepay the loan to meet this requirement.
For modified loans, the new note date must be on or after the later of 210 days after the first modified monthly payment was due on the mortgage being refinanced and the date on which six modified payments have been made on the mortgage being refinanced.
Net Tangible Benefit To Refinance In Texas
The new loan ri monthly mortgage insurance, whether public or private, or monthly guaranty insurance. The new loan is shorter than the loan being refinanced. Dale Elenteny of GCA Mortgage Group is an expert on VA loans in Texas. The borrowers need a tangible net benefit to refinance a VA loan in Texas.
The new mortgage rate on the new mortgage loan is lower than the interest rate on the refinanced loan. If the loan being refinanced had an adjustable interest rate or was modified, the current interest rate must be used when determining if this requirement has been met. The new mortgage payment on the new loan is lower than on the refinanced loan.
The new mortgage loan results in an increase in the borrower’s residual income. The new mortgage refinances a bridge loan to construct, fix or repair the owner-occupants primary home. The new mortgage loan balance is equal to or less than 90% of the reasonable value of the home. The new loan refinances an adjustable-rate loan to a fixed-rate loan. Of course, VA loans are QM mortgages, so the veteran must qualify with income and credit being verified. The broker is not likely to get an AUS approved/eligible until two years have passed since the bankruptcy since DU does not recognize a difference between a Chapter 7 or 13 Bankruptcy on credit.
