Short Refi-How To Save Your Home

Consider the idea of a Short Refi to Save your house

As the economy continues to paste in this slow down, people are still fighting to make it day to day, which is leading to an increase in the need for a short refi or short sell. This economy makes it particularly challenging for house owners to keep current on their mortgage and stop foreclosure. In some cases, regardless of the best efforts, a house owner could find themselves facing the chance of foreclosure. There are things a homeowner can do to help prevent this from going down and protect their investment. 2 options are a short refi or a short sell.

Reduce your Debt

A short refi is a refinance of your current mortgage. You take out a new loan to repay your existing loan. This new loan has new terms, potentially a lower IR or the power to extend your loan length. This lets you keep your house and end up owing less on the home because you are refinancing at your homes currents worth, you are getting a new interest rate and you are probably also extending the length.

essentially, a short refi is a short sell of your home back to you. Instead of you selling the home to some other person, your lender simply restructured a loan and repays the higher existing loan so you can now stay in your home. Now, though, you have lower payments which make it cheap, permitting you to avoid foreclosure.

Cautions of a Refinance

of course, you can't forget that refinancing of any type includes risks and downsides. A short refi or even a short sell is a settlement by your bank on the present loan. Your bank takes the profit cut because they are paying down what you owe now, which is more than the amount you may refinance at. This leaves a piece of money that will never be paid back. The lender deals with this by charging it off as an unpaid debt.

When the bank does this charge off, they can probably report this to the credit firms. Your credit will be adversely impacted. This charge off will appear as a unpaid debt. It is definitely worth weighing your options to make sure that a short refi is the best choice, considering the damage to your credit. You may decide that really doing a short sell to another buyer is the better choice.


in the final analysis, a short refi is your call. You have got to make a choice and think about what will occur in each eventuality. You must think about how much it means to you to remain in your house. You also have to consider the future and if a short refi will actually help you to get back on your feet or not. Think thru your short refi or short sell options so you can make a call that may truly be beneficial for you in the longer term.


looking at foreclosure is frightening and virtually any option, whether it be selling or refinancing, is a wiser choice then letting your home go into foreclosure. Whether you keep your house through a short refi or you end up with a short sell and move out, you should try to stay on top of things. Keep in contact with your lender and try to get help in deciding what your best option truly is.