Short Refi To Save Your Home

Consider the concept of a Short Refi to Save your home

As the economy continues to paste in this slow down, people are still struggling to make it day by day, which is leading to an increase in the necessity for a short refi or short sell. This economy makes it especially challenging for homeowners to keep current on their mortgage and avoid foreclosure. In some cases, despite the best efforts, a homeowner may find themselves facing the chance of foreclosure. There are things a home-owner can do to help stop this from happening and protect their investment. Two 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 current loan. This new loan has new terms, presumably a lower interest rate or the ability to extend your loan length. This lets you keep your home and finish up owing less on the home as you are refinancing at your houses currents worth, you are getting a new IR and you are probably also extending the length.

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

Cautions of a Refinance

of course, you cannot forget that refinancing of any kind includes risks and downsides. A short refi or a short sell is a settlement by your bank on the current loan. Your bank takes the profit cut because they're clearing what you owe now, which is more than the amount you may refinance at. This leaves a bit of money that will never be repaid. The lender deals with this by charging it off as an unpaid debt.

When the bank does this charge off, they will probably report this to the credit bureaus. Your credit will be negatively impacted. This charge off will appear as a unpaid debt. It is well 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 smarter choice.


in the end, a short refi is your decision. You have got to make a choice and think about what will happen in each scenario. You want to think about how much it means to you to stay in your home. 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 through your short refi or short sell options so you can make a decision that may truly be of use for you in the long run.


looking at repossession is scary and nearly any option, whether it's refinancing or selling, is a smarter choice then letting your home go into foreclosure. Whether you keep your home through a short refi or you finish up with a short sell and move out, you should try to keep on top of things. Keep in touch with your lender and try to fetch help in deciding what your best option truly is.