What is a short refinance?

A short refinance is a residential real estate law process in Delaware that allows an existing mortgage holder to refinance a mortgage transaction and to get a loan that pays off the original loan in full. This is usually done to avoid foreclosure or when the homeowner is in a situation of negative equity or being “underwater”. In this case, the homeowner’s current lender agrees to reduce the amount owed on the mortgage and provide additional funds to the homeowner. The lender then receives a better interest rate and the homeowner receives a lower mortgage payment. The homeowner will also be able to pay off the original mortgage and have a lower balance due. When the homeowner pays off the original loan, the rest of the money from the new loan can be used for other purposes. Short refinancing is beneficial for homeowners because it helps them out of a difficult financial situation and can help them save money on their mortgage.

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What is a short refinance?

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