If you currently live in Utah and owe more than your house is worth, you have probably at least heard about loan modification.
But did you know there may be a better option? Many people are finding that it is possible to do something called an FHA short refinance – which essentially has the same result as a principal reduction loan modification without the fees and time – you end up owing less on your mortgage than your home is worth.
How A FHA Short Refinance Works
An FHA short refinance works much like a short sale – except that you get to keep the house rather than sell it to someone else.
The first step to getting a FHA short refinance done is to get on the phone with your lender and tell them that you are interested in SHORT SELLING your home. Once they hear that, they will usually transfer you to the loss mitigation department – which is the right one.
Once you get to the loss mitigation department, you want to negotiate for something called a SHORT PAYOFF – which means that the lender will agree to accept less than you currently owe. If they say they won’t allow short payoffs, then ask them what they are doing when they accept a SHORT SALE.
No matter what – don’t take NO for an answer! Many times (most of the time) the lender will give you a different answer depending on who you talk to. If you don’t get the answer you want – just try back the next day and speak with someone else.
Once you get the SHORT PAYOFF, then you should be able to get any FHA loan officer to help you get a new FHA loan for that amount – and easier than you can say the words “loan modification”, you will have a new fixed rate FHA loan that is 95% of what your home is now worth.
No matter what, don’t give up! A FHA short refinance can be a much better long term solution than a loan modification. And for many people in Utah – the FHA short refinance is easier, cheaper and better than a loan modification.
Easier. Cheaper. Better.
Excellent!
