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!
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