Pros and Cons of a Short Refinance

A short refinance is one of several alternatives that allows both a lender and home owner to avoid foreclosure.  It is typically available for borrowers that are in default and involves creating a new loan amount than the existing outstanding balance owned.  The difference is typically forgiven by the lender.  Why would the lender agree to such terms?  Foreclosure is almost always more expensive for the lenders not only because of the physical costs but also because of the loss of payment / interest revenue during the process.

Pros

  • The borrower retains ownership of home
  • The mortgage balance is lowered
  • The interest rate is lowered
  • Equity is regained in home
  • Monthly payments are reduced

 

Cons

  • The borrower’s credit score is damaged
  • The process is time consuming
  • There is no guarentee
  • Qualification is required (usually requires Full Doc and Stated Income)
If you would like to speak with one of our specialists about enrolling in a particular program, or just need some help deciding which solution is right for you, contact us at 888-609-1854 | Opt. #1, or fill out the contact form to the right.

One comment

  1. I thought this was a pretty good article. I always like reading articles like this one. I’ll check out more of your articles.

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