FHA Short Refinance: The First Thing To Do

Many people who are currently owe more on their mortgage than their home is worth have heard about a “short sale”.

They have also heard about a “loan modification”.

But something that is relatively new – and proving to be at least somewhat effective in this situation is the FHA short refinance.

Essentially, the FHA short refinance works similar to a short-sale, BUT rather than sell your home to someone else, you refinance the property and get a new loan for 95% of what the appraised value of the property is worth.

And the #1 secret to getting a short refinance done is…

Pick up the phone and ask your lender for a short sale packet.

Once your lender knows that you are in the process of either short selling your home or something worse – they will transfer your file to the “loss mitigation” department who will then be your contact. Once you get there, you will want to simply ask your lender if they will accept a “short refinance” – and you may be surprised at how many times they say “yes”.

The reasons they say yes?

Because chances are pretty good that they bought your mortgage for pennies on the dollar and they stand to make a profit if you refinance — because it will take the mortgage off of their books and they can record a profit.

So — if you are wondering what the first step to getting a FHA short refinance done is –

Pick up the phone and call your lender.

Tagged as: FHA Short Refi, FHA Short Refinance