Short refinancing Ins and Outs

              Here below is the OUTLINE of what the program can and cannot do for you

It amounts to a “short refinancing” for lack of words, but it is a Rate and Term Refinancing with all the same guidelines by Conventional loan or FHA standards. What makes it work is the following:

· The bank that is holding the mortgage now must be willing to deal with the borrower and the loan officer and agree to accept a payoff based upon 90% (conventional) or 97% (FHA) of the new appraised value.

The primary lender must agree to the short payoff of their current loan and issue a letter stating the dollar amount, etc. they will accept as well as the fact that they will not report this as anything adverse towards this borrower in the future.

In the case where the second lien holder is different from the first, your second lien holder must either be willing to subordinate the loan or you must be in a position to pay it off or close it and pay the balance.

Some people had taken out small HELOC seconds to do repairs or improvements and the balance may be small but it needs to be addressed at the time of the refinance. This is the same rule that would apply in any Rate and Term refinance.

There are several guideline and condition that have to be met in order for this to work, and the most important is that you must be current  on your loan payment, in addition, You must understand this is a negotiation where the current lien holders may take their time in deciding because they have their own reasons financially for accepting a loss and the time frame will be determined by them. Once the paperwork and agreement have been made, a normal turn time through Local underwriting and Documents will take place.

If you wish to receive detailed information regarding this program, please fill up the form below.