Hi all, This is a two-part question with two different scenarios, will try to keep it brief. I have a bankruptcy falling off my credit report in less than a year. My home was included on the bankruptcy but not reaffirmed, I just continued to make payments. The mortgage will be paid off within a year. The mortgage co. never reported my payments to the CRA's, and the mortgage tradeline does not exist in my credit reports. If I apply for a new home mortgage, do I have to disclose on the application the payments I'm making on the mortgage even though the mortgage is non-existent on my credit reports? Or, would it be feasible to show the bank a complete payment history from my mortgage to help show my credit-worthiness, a full history of on-time payments made on a 20-year mortgage? Do banks even take something like that into account? I realize if they knew I was still paying off my mortgage, my chances for a good rate would fall considerably. Yet, would it be worth it to show them my payment history? This would probably be contingent, since once paid off, I plan to use the sell of the home for a down payment on a new mortgage. I don't want to "falsify" any information, nor do I want to get into trouble for failing to disclose any payments. I just want to know if it can be done. Thank you.
This is a very interesting question. In a way you're just paying rent and could stop paying at anytime if you felt like it. You could then move out and the bank couldn't come after you for anything. So I guess my response is yes, I don't see why you couldn't get away with leaving the payments you're making off the application. Then again, even if you chose to not disclose the payments, a good underwriter should find out about it when they examine your bank statements. I'm assuming you're making payment each month directly from your bank account. Anyway, if it were me, I would just disclose the payments because a mortgage does exist- you're just not personally liable for it. And since your mortgage was included in the bankruptcy, I doubt your lender would be willing to consider that loan as proof of payment history. It's not technically an indication of your credit risk any longer because you're not liable for the debt. I don't know, I could be wrong but it just seems unlikely to me.
Thanks for your response, Joshua. I do plan on paying off the mortgage soon, and the reason for the questions is because I'd like to just find out what position I'm in for the loan, and because I plan on loan shopping from more than one bank. My usual bank is aware of the predicament, but we haven't discussed how to address the application - guess the only way to find out is talk to them. I really would prefer to be honest and have all the cards on the table to avoid any nasty surprises, maybe I should just trust my instinct and disclose it. I do have all the documents of the mortgage contract, payment history, cancelled checks etc, so it still may come in handy (or not, guess I'll find out!).
You are making the right decision by presenting all of your payments to the bank or mortgage broker you will be working with. You would hate for a underwriter to find out about the payments in the middle of the transaction. Then he or she would look over the rest of your file very closely. Thanks! Heather with BoostMyScore.NET
Are you still living in your home? If so, you will have to disclose the mortgage because the loan application is going to ask for your address and if you rent or own your home. I can't see anyway around this one. Thanks! Heather with BoostMyScore.NET
