(My Original Blog Post: http://www.minnesotainvestors.com/blog/short-refinance-vs-loan-modification/)
Most of you have heard the news from Obama as it relates to companies, and services that can help you with your home solution in this current economy. Chances are you took out a mortgage, or home loan a few years ago with your bank and now you are afraid that you may have bad credit, or owe too much on your house, now that housing prices have gone down.
Federal laws have come out with some great loan modification programs, and now you are hearing about, and you are wondering how to make sense of all of this and what are the qualifications.
Most loan modification programs will not allow for a principle reduction. If you are
looking for an upside down mortgage solution, then a short-refi may be better for you.
My research shows that GMAC, Wells Fargo and Countrywide are widely searched as it relates to lenders. If you want to sell instead of stay in your house, a short sale may be a better solution.
The short refinance process usually takes 120 days or less to complete. This is not like
your standard refinance process on your mortgage. The lenders have to take what's called a short payoff, or short pay refinance, it's a unique program, just now becoming popular. With the short pay of the mortgage you'll want to check with your tax accountant, it's likely that the lender and IRS will deem this as a discharged debt, and you may owe taxes on it.
The company I am affiliated with will handle the negotiation. Typically a new bpo is ordered, this is a broker's price opinion. This is done to ensure what the current market value is of the property. The buyer gets qualifying for the new loan amount with the current lender or a new lender through FHA. Through the FHA, homeowners are able to qualify for low fixed interest rates and high LTV (loan-to-value ratios on their mortgages)
The homeowner must be able to afford the new loan and qualify showing:
tax returns, w-2’s, 1099’s, check stubs and bank statements, a full documentation loan. The current program is for those not yet in foreclosure. If foreclosure has been filed already, contact us and we'll look at the loan modification or short sale solution for you. The costs to the seller are only around $224 upfront. You keep ownership of the property the whole time and stay in your house. You don't have to be behind in payments like most loan modifications. Prior credit histories such as bankruptcy and foreclosure don't matter. Debt to income can be as high as 45% when qualifying.
Documents you'll soon need for qualifying:
(Info needed for anyone to be put on the loan)
-2006 & 2007 W-2’s
-2006 & 2007 tax returns
-Check stubs for the past 30 days
-Bank statements covering the past 60 days-all pages from the statement
-Most recent statement(s) for investment accounts: IRA's, CDs, Money Market accounts, Pensions
-Your mortgage statement(s)
-A copy of your homeowners insurance policy
-Copies of your ID and Social Security Card
Please go to http://www.ronorr.com to learn more and to contact me
ron@minnesotainvestors.com
Sunday, April 11, 2010
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