If you have equity in your property (home is worth more than you owe the bank) this may be another option. Most lenders require you to have 20% equity in the property in order to consider a conventional refinancing program. This means that the bank will only re-finance 80% of the appraised market value of the home. That 80% also must be sufficient to pay off the existing loan(s). If your credit score is good (720+ FICO) you may be able to qualify for a new loan of up to 95% of current market value. Check with your lender about the possibility of re-financing under FHA programs. If you qualify, you may be able to refinance for up to 96.5% of current market value. There are cash-out restrictions and mortgage insurance premiums are mandatory, but this still may be a good option for some with less than perfect credit.  This option typically makes sense for those who originated the loan(s) within the last 6-months or greater than 5-years ago. The majority of loans originated from 2004 through 2008 are likely to have loan balances in excess of the current market value, and are therefore probably not candidates for traditional refinancing. It may also be possible to do what is termed a “Short-Refinance” where the existing lender(s) is willing to accept the proceeds from the new loan as satisfaction of the existing loan(s). In these instances the current bank must agree to accept less than is currently owed on the property and is the equivelant of an abbreviated short sale. This becomes very challenging, as your documentation must support your qualification for the new loan, and at the same time, support the case made to the existing bank to view your situation as a hardship. We will be glad to assist you in making the determination about whether or not you can pursue the Refinancing or Short-Refinancing option in order to make the monthly payments comfortably affordable. Please fill in the information request below and we will contact you promptly to set up a consultation. |