Question

Home loan after bankruptcy using free and clear title for collateral?

I own a house free and clear but want to relocate due to my wife graduating with her BSN to a larger market. I am a critical care RN and there are jobs in any large market for me. Are there lenders out there that will provide a home loan using my old house title as additional collateral if we decide to rent it out and not sell because I think with down markets and the bankruptcy I will not be able to get a new loan. Any thoughts.

3 years ago - 5 answers

Best Answer

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Most lenders would want you to wait a minimum of 2-3 years before considering approving you for a mortgage loan after a bankruptcy.

If the bankruptcy was not real estate related you might consider applying for a mortgage loan with a mortgage broker or banker. They might be of service to you, though the interest rate would be higher.

Of course your credit scores, proof of income would determine if you would be approved for a mortgage loan and the interest rate you would be able to get. As long as you are in the same career field and secure a position in your new city then you would be ok.

Since your wife has just finished school and would not have a two year work history, her salary would not play a very important role in you being approved for a mortgage loan.Your rental income would be accredited for income up to 75% as income on your mortgage loan application.

About the question you asked there are some lenders that will accept the free & clear house as extra collateral for the purchase of a new home where you might purchase. This is called a mortgage wrap simple a wrap. There might be a problem if the lender you apply to for your mortgage loan that is not authorized to do loans in the state in which your free and clear property is located.

When applying for a mortgage loan see if you qualify and would be approved without telling your lender you would be willing to place this free and clear property up as collateral, even though you would have to list it on the mortgage loan application.


I hope this has been of some benefit to you, good luck.


"FIGHT ON"

3 years ago

Other Answers

You won't be able to use the old house as "collateral" for another house.

How LONG after bankruptcy are you? What are your credit scores now? Will you have verifiable income to service the loan? If you're going to relocate, RENT for a while at the new location until you both have at least 12 months' employment history at the new location and can prove that the existing house can rent with a positive cash flow. Otherwise, sell the old house first.

by Caveat Emptor - 3 years ago

how were yu ever allowed to file for a bankruptcy is you owned a house with 100% equity in it? that makes no sense - they either would have forced you to sell it to pay your debts or just would not have allowed teh bankruptcy

by Zarg222 - 3 years ago

NO. Go rent if you can even find a landlord willing to take you on as a tenant. You may have to pay the full year up front.

by Iffy - 3 years ago

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by Lotus Lim - 3 years ago