Can I take out a home equity loan on my home to pay for real estate to be used as a rental? I was granted a chapter 7 three months ago.

Asked by bleiden, Kansas Sat Sep 22, 2012

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8
John Chaney, Agent, Overland Park, KS
Tue Sep 25, 2012
Talk to your banker. If you have enough equity in your personal residence, cash in the bank, and you are willing to put up your primary residence as collateral, he may consider the risk.
0 votes
Annette Levi…, , New York, NY
Tue Sep 25, 2012
Your current car loan is reported and therefore affects your credit score. Did a car salesman tell you to get another car?
0 votes
No but my sister said since I had the loan before bankruptcy that it wouldn't help my credit score much.
Flag Thu Sep 27, 2012
bleiden, Home Owner, Kansas
Tue Sep 25, 2012
My credit was excellent before the "road to disaster" hit! I have a car and am making timely payments but I was told I would have to buy a new car PB to improve my credit and the old car loan won't apply. Is this true?
0 votes
Dan Tabit, Agent, Issaquah, WA
Mon Sep 24, 2012
Bleiden,
I want to respond to Annette's answer and your reply. Many good people have found themselves in similar situations requiring bankruptcy due to failures of a business, loss of a job in this economy, health and marital issues. Once you find yourself over your head financially you can continue to struggle against a burden you can't overcome or take the legal option of bankruptcy.
Bankruptcy does not make anyone a bad person, but it will carry consequences for a while. Because some who were irresponsible and just overspent on luxuries and vacations lenders want to allow time before they take on someone who just walked away from previous debt. For conventional financing the minimum is 2 years and to obtain a loan then you will need to re-establish some credit. This is best done by getting a secured credit card from your bank or credit union. Pay your utilities on time, use and pay off the secured credit card every month, keep any other bills outside the BK current and you may be able to get conventional mortage loan or HELCO in 2 years. If you delay in getting your credit re-established it will take longer.
If your injury is resolved and your kids are doing well, you can find yourself back in a little while.
0 votes
John Chaney, Agent, Overland Park, KS
Mon Sep 24, 2012
Yes, you may be able to cross colaterralize your existing residence to purchase the new property.
Talk to your local lender.
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Annette Levi…, , New York, NY
Mon Sep 24, 2012
You went Chapter 7 bankruptcy because you couldn't pay your bills (manage your money). Why do you think you can manage it now?
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I went through a period of personal injury, unemployment and carrying my children's debts. I am wanting to invest in a rental that I can profit on and am employed full time. Don't ever want to get in a situation of having NO income again!
Flag Mon Sep 24, 2012
John Chaney, Agent, Overland Park, KS
Mon Sep 24, 2012
FHA may loan on a primary residence in 2 years if you have income, stay out of debt and put 10% down payment.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sat Sep 22, 2012
Bleiden,
I doubt it. Post BK usually takes 2-5 years for lenders to be willing to approve a new mortgage. During that period, any reestablishment you can get with a secured credit card or high down payment auto loan will go a long way to getting an approval when the wait time is over.
0 votes
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