Here is a short check list for those looking to
1. To Complete a refinance on an upside down mortgage you will need to get your existing lender to agree to a payoff on your existing loan that is less than your existing balance or short payoff.
2. More than likely you will need a FHA loan approval to get the reduced payoff in the first place so contact someone who understands the process (I know someone! :) )
3. To qualify for an FHA loan you will HAVE to provide your income so for all those people who qualified for a home loan previously without using income or using modified versions of income be prepared.
4. You existing mortgage payments SHOULD be made on time and if they aren't then you may want to consider a loan modification.
5. Part of the getting a short payoff on your home will be an appraisal or BPO (broker price opinion)
6. The bank will have to see you have a need so be prepared to present a compelling case for the bank to consider. They really don't want to give you a break but you need to show them that you need their help.
This mini list should provide you with a good foundation to help you move forward. I would suggest speaking to someone about your situation before pursuing a refinance to be sure you have all your options covered.
As always, I am here to help so let me know what I can do.
Contact me at
Brent[at]brentlane.net
UPDATE: There have been some recent updates thanks to the Making Home Affordable Program and Fannie Mae and Freddie Mac Refinancing Upside Down home Mortgages Program. Both programs are very helpful for homeowners who have upside down, underwater, negative equity or any other way you need to say you owe more than your home is worth. If neither of those programs will work for you then there are other options.
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2 comments:
Great article, but isn't it a lot cheaper for the bank to simply "modify" the loan? Why would a bank accept a short pay when it's cheaper to modify?
Just make sure that when you do short pay refinance your mortgage, that you don't
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