Orlando FHA Short Refinance

An FHA Short Refinance is designed for people who owe more than their home is worth. Wow, this is more of us than eer anticipated is it not?

Well, when faced with this scenario, there are about three main options available which are determined by the process of negotiating with your current mortgage lender:

1. FHA Secure Refinance - This was put forth by Congress and unfortunately was more symbolic than it was substantive. Sorry… facts can be inconvenient. Anyway, this is typically the case when the borrower owes on two different mortgages that are now greater than the total of the homes current value. For an FHA Secure Refinance, the new lender will allow the second to remain as a subordinated lien but this is a very small box to fit in to be sure.

2. Short Refinance – A Short Refinance is also considered a Mortgage “Write Down” where the current mortgage company allows for a payoff that doesn’t add up to the current amount owed. There is a process of negotiating with the current lender to allow this transaction to take place.

3. FHA Secure Short Refinance – There are some unique occasions that the current mortgage company will allow the writing off a certain amount of the balance and arrange for an unsecured loan to be paid independently by the borrower. The benefit with this example would be to obtain a very low interest rate on the remaining balance that was not wrapped up into the new mortgage payment.

All of these options may need the help of an Orlando mortgage professional that has had experience negotiating FHA Short Refinances with the reeling banks.

In many cases, the borrower doesn’t have to pay for any of the fees at the time of that they make application and can wrap the normal costs into the new-born mortgage.

Written by Chris Brown, an Orlando Loan Officer. For more information about purchase loans or refinances on primary residences or investment properties, please contact me directly @ 407-377-0500 x 210.