Refinancing a Second Mortgage or Home Equity Loan
If you are currently in the process or have investigated refinancing your second mortgage or home equity loan, you may likely find that you cannot receive bank financing because of the appraised value of your home. The recent deflation of home values has left many homeowners stranded, owing more than what they own and therefore unable to refinance or sell their home to downsize. Or, based on tightened mortgage loan standards, you no longer qualify for the additional debt based on your budget and income. This can be frustrating and causes many homeowners to feel “trapped” in their homes.
We are here to help. Our team of caring professionals can help you resolve your mortgage and other debt obligations. We offer free consultation to review your mortgage situation, discus how you may legally remove your second mortgage instead trying to re-finance it. Call us today at 866-261-8282 or click here to schedule an appointment online. We have convenient office locations in Detroit, Ann Arbor, Dearborn, Southfield, Flint or Warren, Michigan or schedule a time to speak to a licensed attorney over the phone.
Chapter 13 Can Help Reduce Your Mortgage Payments
The Chapter 13 Reorganization may eliminate the need to refinance your 2nd Mortgage or Home Equity Loan. Assuming that your home is worth less than what you owe on the first mortgage, we can actually convert your secondary mortgages or home loans to “unsecured debt” through the use of a Chapter 13 plan.
What is a Chapter 13 Plan?
Simply put, it is a court-structured repayment plan that spans a 36 – 60 month time frame. It is designed to provide you with legal protection from your creditors as you reorganize your debt obligations. The purpose of the program is to provide you with reasonable repayment terms to pay off as much of your debt as you can during the payment plan. At the completion of the program, any remaining balances on unsecured debts (including your second mortgage or home equity loan) is legally eliminated or discharged allowing you to make a fresh financial start.
How Would a Chapter 13 Plan Help You?
- You will pay less money from your monthly budget toward your overall home mortgage obligations.
- If you own a rental property(s), the plan allows you to reduce the principal mortgage(s) debt to current market value. Using your tenant’s rent payments, you will own the property(s) free and clear in 3 – 5 years.
- Other debts that may have been hindering your ability to refinance your second mortgage or home equity loan can be consolidated and reduced through the Chapter 13 plan. All credit card bills, medical bills, personal loans and past loan deficiencies are reduced to 0% interest and paid back based on your monthly budget and ability to pay.
- Most clients will experience a substantial, if not total, elimination of their unsecured debts.
- At the completion of the Chapter 13 program, any unpaid balances on unsecured debts are legally eliminated.
- If you need help setting up repayment terms with your primary mortgage or owe back property or income taxes, the Chapter 13 plan can assist with that. Filing Chapter 13 can legally stop a home foreclosure if that is something you are facing.
- Overall, the program provides you with legal protection from creditors. The program can stop vehicle repossession home foreclosures, judgment actions, wage garnishments, etc.
- Importantly, the Chapter 13 program is designed to help you to improve your credit. The two factors that have the biggest impact on your credit are:
The Chapter 13 focuses your budget efforts on paying down (and ultimately elimination remaining balances) principal debt each month through the program. This improves your leverage or debt-to-income ratio. The court-appointed trustee provides consistent, timely payments to your creditors each month. No more “late reports” to the credit bureaus! These two factors combined influence 65% of your credit score according to FICO.
In summary, the Chapter 13 plan can not only legally remove secured liens on your home such as a second mortgage or home equity loan, but can also consolidate and potentially eliminate other bills to provide you with more breathing room in your budget and a fast track to debt-free living. Simply refinancing your second mortgage or home equity loan cannot provide you with this benefit.
Experienced Michigan Bankruptcy Attorneys
Our experienced Chapter 13 Attorneys can provide you with a free consultation on how we may assist you in reducing your mortgage obligations. Call today for a free consultation with a one of our qualified lawyers.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action.We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Detroit, Southfield, Dearborn, Flint, Ann Arbor and Warren, Michigan. Please call us toll free at 866-261-8282866-261-8282 or Click Here to schedule a consultation right now.