Thursday, September 10, 2009

Short Pay Refi Mortgage Loans Using FHA in Los Angeles Saving Homes

If you are upside down on your current home mortgage loan, there is a new option for you that could save your home, your credit rating, and smooth out your financial life.  Santa Monica based Mortgage Broker Bill Rayman is suggesting the use of Short Payoff Refinance Loans or Short Pay Refi.

"Our Standard FHA Mortgage Loan Programs now offer you the option of a Short Payoff Refinance loan," says Rayman.  "You may have been thinking of using a Short Sale as a solution to avoid foreclosure by selling your home for less than what is owed.  However, now the  Short Payoff Refinance loan option is becoming a popular tool for borrowers to retain their home, while at the same time lowering the principle balance.  With a lower principle, you will  lower your monthly payment.  And all of this is under a fixed rate FHA insured loan with the easier qualification requirements."

What's a Short Pay Refinance?

Here are the simple steps.

1.  First we must establish the current value of the home.  The value must be less than you owe.

2.  We then apply for the FHA insurance to get you approved at the maximum loan to value for that new lower value. 

3.  Now, armed with our comps at current market value and our FHA approval, we enter into equity re-negotiations with your bank for a discount on the current mortgage.

4.  Once the bank accepts the offer we can complete the new loan transaction at the lower amount.

How do you qualify for  a Short Pay Refi?

1.  You must still have decent credit, ficos, income, and no mortgage lates.  If you have been late once, it makes it harder, but not always impossible. 

2.  The current value of the home must be less than the amount owed.

Why would your current lender agree to such a thing?
Foreclosing on a property costs the lender money. Realtor commissions, legal fees and highly paid management staff salaries add up fast. The Short-Pay Refi results in much lower costs in legal fees, commissions, and home maintenance.
Short-Pay Refi puts you in a better position than standard loan modifications because you not only lower your payment, you also lower the principle balance with an FHA insured loan.

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