Short Refinance, A Practical Look

Last week I received a call from a family that was more than $160,000 upside down on their mortgage. The call started out as a possible listing for a short sale but about half way through the application we came up with an alternative solution, a “Short refinance” through the Obama Administration’s “Making Home Affordable” program.
If you qualify, the program is excellent and may offer some homeowners the ability to refinance in the following situation:
you are current on your mortgage payments but unable to refinance to a lower interest rate because your home value has decreased.

For example, this is my applicant’s situation: Current loan: $433k Payment: $3,036 Monthly (Principal + Interest) Current balance: $278k Stable income and no late payments in the last 12 months
Assuming that my client meets all the program requirements, this is what their new loan will look like:

New loan: $243,000
New payment: $1442
Monthly (Principal + Interest + PMI)
You did the math right…Less than half!

This program will not help everyone but it certainly offers a solid solution for those who qualify. A 10 minute phone call can usually determine your eligibility therefore this is obviously worth looking into. Please contact me if you would like more detailed information about the program, I would love to help you out!