Many homeowners are upside down in their mortgages, making traditional refinancing difficult, if not impossible. For those suffering from negative home equity or adjustable high interest rates who have been unsuccessful at obtaining a traditional mortgage refinance, a short refinance may be the path to a much better loan. Learn the ins and outs of short refinancing and decide whether it's right for you.
Short Pay Refinancing -- What Is It?
Short refinancing is a permanent solution to an upside down mortgage, in that your current lender accepts a loan payoff that is less than the principal amount due. In agreeing to a short payoff, your lender adjusts the loan-to-value (LTV) ratio in your favor, making it possible to refinance with a new lender or stay with your existing lender.
What's more? You get to keep your home. A short refinance can reposition you in the real estate market by reducing negative home equity and lowering your mortgage payments.
Short Refinance Lender Benefits
Lenders are no strangers to the condition of the housing market. In minimizing your risk by adjusting the principle and agreeing to short pay refinancing, they minimize their own risk.
Eligibility for Short Refinancing
Your ability to qualify for a
short refinance depends on the stability of your income, your credit score and whether you've kept current on your mortgage payments. A thorough credit evaluation and home appraisal are necessary to determine your eligibility.
Contact a Qualified Mortgage Specialist for a Short Refinance
In order to successfully carry out a short refinance, it's crucial to procure the services of a mortgage professional who specializes in short refinancing. A qualified mortgage expert can orchestrate the debt negotiation process and reach the best deal on your behalf. Additionally, since the process involves a settlement with your existing lender, your
short refinancing mortgage specialist can parley the terms under which your lender reports the transaction to the credit bureaus.
