Grabham & Associates will often have one of our preferred lenders, home inspectors, escrow & title officers, etc... contribute a piece to our Blog. We hope you will find this information useful and interesting. Please feel free to comment or contact us directly with feedback. 

This week's contribution comes from one of our preferred lenders. He has a new program that will allow you to "short" refinance your home if needed if you meet all the guidelines. Although this might not be for everyone maybe you know of someone who this information might be helpful.

 

 

                                                 SHORT REFINANCE

 

Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development has approved a new loan program to refinance your home at market value!

 

 Refinancing at current market value is the better option than loan modification. It is a transaction, where the current lender agrees to accept less than the full amount owed on your property. It results in reduction of principal on your loan. A Short Payoff is when your current lender reduces the principal balance on your mortgage and allows you to refinance or sale your home at current value.

 

 

Key differences:

 

Loan modification negotiates change in rates and terms leaving principal unchanged.

Short Refinance negotiates reduction in principal.

The process is similar to a short sale but, instead of the property being sold, it is refinanced with a new lender. The short-refinance allows the homeowner to retain ownership of the property.

In many cases, short refinance requires approval and consent from a new lender and will require better credit score along with a reasonable debt-to-income ratio. We are working with the largest pools of lenders, which are available to help with short refinance.

 

Refinancing at Market Value

  • Must be current on mortgage payments
  • Minimum middle credit score is 620
  • No more than one 30 late mortgage payment in last 12 months
  • Documentation of three most recent mortgage payments
  • Payoff letter
  • Written Principal Reduction Agreement from current lender – The agreement must include the name of the borrower and must indicate the loan amount being paid off
  • Primary residence only
  • Must have sufficient documented income to qualify for the new lower loan amount (no stated income)
  • Must be able to prove hardship
  • Borrower with two mortgages are not eligible at this time

 

Many lenders are now cooperating with a principal reduction to refinance your home. The first step is to contact your existing lender and verify that they will cooperate with a short payoff/settlement to refinance. The next step is to apply. We will request your employment, income, and asset documentation to verify that you will qualify for a new FHA loan at current market value and issue a loan approval. We will then negotiate with your current Lender to achieve the desired principal reduction for your refinance.

 

 

EXAMPLE: Short Refinance (Refinancing At Current Market Value)

 

Current mortgage:                                      $300,000

Current value:                                            $220,000

New loan(97.75% of current value):            $215,050

Closing cost for new loan:                            $5,000

Current lender approves short payoff for:     $210,050 

 

For more information and all inquires please contact Troy Schuricht below:

Troy Schuricht

CFS Mortgage Corporation

7720 N 16th st   Suite 325

Phoenix, AZ 85020

602-354-0537- office

602-241-9912 - fax

www.TeacherAPlus.com

 Banker #0905178