Refinance Upside Down Mortgage: Modification Tips For Anyone Looking To Refinance
This is definitely one of the big banks and lenders best kept secrets. But with the recent increase in foreclosures and the tightening of lender guidelines, which makes it even harder to qualify in today’s market for a refinance, and not to mention the drop in property values in such areas as Fort Lauderdale and Miami has brought the short refinance upside down mortgage to the front lines. While some might have heard the term Short Sale – which is the process you would go thru if you are trying to sell but you owe more than the house is worth. Now the Short Refinance – is the process you would go thru if you want to keep you home, but you need a better loan program that will be more affordable and you owe more than your house is worth so you can’t do a regular refinance.
Only “responsible” homeowners need apply – i.e., the homeowner must be current on mortgage payments. The borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115%. The existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. To facilitate the refinancing of new FHA-insured loans under this program, the U.S. Department of Treasury will provide incentives ($500) to existing second lien holders who agree to full or partial extinguishment of the liens.
Writing a hardship letter is one of the hardest things to do in this process,but its also very important. If you need help with this you can use one of the mortgage modifications inexpensive services or research this before hand. It’s important that your hardship letter has a number of details that are essential to getting your mortgage modification approved. The home owner needs to include a completed life of loan history to see all the charges and fees you’ve attempted to or failed to pay. Also include inflation and/or loss of property values.
Normally when a homeowner finds themselves in foreclosure, they would only hear about 2 options either file bankruptcy or try and sell. Lately, loan modifications have become more popular, but that still doesn’t mean that is best solution for most homeowners. Here’s why, we offer the lender a short-refinance offer first and if for any reason it is not successful, then we will proceed with an offer to negotiate a loan modification for the client. A short-refinance can basically create equity in a property, as we are getting the amounted owed to the lender reduced. It reduces the mortgage to the current market value, while eliminating the upside-down loan. While A loan modification can keep the homeowner’s interest rate down to a comfortable level and put them into a fixed rate loan, while also placing any arrearages back into the loan.
These Mortgage Modification Tips should help you understand some of the things you need to know when getting all your documentation together. Remember to do your research and find a mortgage modification company that’s right for you. This company will be able to help you better understand everything and make the process easier on you. You’ll also want to make sure you are as organized as possible be careful when itemizing your expenses and get accurate data on your income. Take into consideration how hard the hardship letter will be for you to right. Try to be in a place where you can be away from all the distractions in your life and think clearly when your writing.
Learn more about Obama Mortgage Relief Plan Qualifications.
