Archive for FHA Refinance
Conventional vs. FHA Refinancing
Posted by: | CommentsIn today’s tough economy borrowers need all the savings they can get so comparing conventional and FHA refinancing options is a smart move. Now more than ever, homeowners who need to refinance like to compare traditional loan options to government mortgage programs. There are benefits to both a conventional and FHA mortgage, so the pros and cons come into play based on your needs and loan eligibility.
Compare Conventional and FHA Refinance Loans
The Federal Housing Administration provides a number of options for homeowners, from loans to refinancing. Refinancing a home can be an excellent way to reinvest in your property, and offers a number of different benefits. There are a number of key differences when it comes to conventional vs. FHA refinancing, and knowing these differences can help you tackle the prospect of refinancing your home a little more easily. Here, we’ll go over some of the basic information behind a conventional and FHA refinance, respectively, so that you can decide which is right for you.
HUD has extended FHA refinance guidelines to offer several options for homeowners. The first type of FHA refinance is the cash out refinance, which is typically chosen by home owners whose property has increased in value since they originally purchased it. Cash out refinancing enables the home owner to refinance an existing mortgage by taking out another mortgage for more than they currently owe. On the other hand, home owners also have the option of a streamlined refinance, which is called such because it enables the homeowner to rapidly reduce the interest rate on the current loan. This can usually even be done without getting an appraisal, cutting down on paperwork and saving you time and money.
One benefit of FHA refinancing is the streamline refinance option. With the FHA loan, borrowers get quick access to home refinancing if interest rates fall below the rate they locked into. The streamline refinance program enables borrowers to revise their terms without an appraisal and in most cases without income documentation. With the conventional loan there is no streamline mortgage refinance option, so borrowers would need to start the process all over again.
FHA mortgage refinance programs are only available to home owners who are using the property they wish to refinance as their principal residence. Conventional refinance loans have very strict guidelines and requirements, such as higher credit scores. Conventional refinancing can sometimes incur penalties if the refinancing is not done at the proper time, and thus sometimes people can get trapped into not being able to refinance when they want to. That said, one disadvantage of FHA refinancing compared to a conventional mortgage is that FHA insurance is not cancelled when the home owner reaches 22% equity, although some home owners are eligible for an FHA insurance refund.
Great Rates on FHA and Conventional Refinance Loans
Conventional vs. FHA refinancing requires some careful consideration, and there are certainly advantages to each. Years ago, FHA mortgage rates were a bit higher, but these days conforming and FHA rates are typically the same. Today, most lenders offer the FHA mortgage product because it is available to those with poor credit scores and is more flexible than a conventional mortgage.
One thing to keep in mind though is that HUD has promised increased fees and mortgage insurance premiums for FHA loans, so refinancing with FHA could lose some luster if the insurance hike swallows your savings. Taking these factors into account can help you get the best type of mortgage for your family, and get you the home you want.
Home Refinance Help
Posted by: | CommentsThere has been a lot of talk of record low mortgage rates and home refinance programs, but millions of Americans continue to search for mortgage refinancing help. According to iServe Lending’s Al Pereida, “Unfortunately millions of Americans still need refinancing help because they don’t qualify for today’s lending guidelines.” The California lender continued, “We are seeing many applicants fail to qualify because of low credit scores and late mortgage payments.”
In 2011 all indications point towards even tighter guidelines. Conforming, VA and FHA loan programs are requesting increased documentation and higher criteria for qualifying. Mortgage Refinancing Buzz continues to report great refinance rates for qualified borrowers.
- FHA Streamline Refinance
- Cash Refinancing
- VA Mortgage Refinance
- Low Conforming Rates
FHA Streamline Refinance Tips
Posted by: | CommentsBrokers and lenders across the country continue to talk about the streamline refinance sponsored by the Federal Housing Administration that HUD oversees. FHA streamline rates have never been lower and the efficiency for processing streamline loans has improved dramatically.
Being able to refinance with no appraisal is an amazing benefit in today’s slumping housing market. Besides the military VA loan, the FHA streamline is really the last 100% refinance opportunity for borrowers who are stuck with an underwater mortgage.
Highlight of the FHA Streamline Program
- No income documentation required with W2 borrowers (no stated income with retired or self-employed)
- Over 580 FICO – statistical appraisal max LTV 125% – NO appraisal required
- Under 580 FICO – Appraisal required, max LTV 90%
- Rate Price without FICO adjustments
- FHA Mortgage Terms: 30yr Fixed, 15yr Fixed, 5yr ARM
- Manufactured Homes OK with statistical appraisal max LTV 90%
- No appraisal required if 12 payments made, 0×30, over 580 FICO
FHA streamline refinance notes: Ask about our self-employed mortgage options for FHA borrowers. FHA streamline guidelines are subject to change. Read the original article > FHA Streamline Refinance Program online at the FHA loan blog.
Hope for Home Refinancing Returning
Posted by: | CommentsLots of homeowners are frustrated because that they can’t qualify for mortgage refinancing even though home loan rates are at all-time lows. Rachel Beck reported in a Reuters article that these homeowners are not by themselves as many people on Wall Street are rooting for lenders to loosen the refinance guidelines because they believe that refinance boom would be an effective way to boost the economy. Their train of thought is that if more homeowners can take advantage of home refinancing, that they will have more disposable income to help spend us out of this recession.
Those economists and analysts calling for a mass mortgage reset say it could be engineered by the government, which controls the giant mortgage lenders Fannie Mae and Freddie Mac. Have them loosen underwriting criteria and offer discounted lender fees in an effort to help the distressed homeowners qualify for a fixed refinance loan that could boost their quality of life with an immediate increased cash flow..
The only way, the trend of mortgage refinancing in high volumes nationally would indicate that banks and lenders were reverting to looser refinance guidelines, one of the things that got us into this mess. It could also boost mortgage refinance rates for new borrowers and force U.S. taxpayers to shoulder more risk, since they technically own Fannie and Freddie. Dean Baker, co-director of the left-leaning Center for Economic and Policy Research in Washington said, “At some point, we have to ask ourselves how much more can we ask taxpayers to do to support people staying in their homes.”
Wall Street has been buzzing with talk of additional mortgage relief. HUD announced a new FHA short-refinance program that will offer mortgage aid to borrowers who saw their property value tank in the last few years. Apparently, GMAC has been offering these FHA short refi’s to distressed homeowners residing in California. Millions of borrowers haven’t been able to qualify for fixed rate mortgage refinancing. Many of these homeowners have been rejected multiple times by multiple lending companies. Unfortunately, missing out on these record low mortgage refinance rates, is like leaving thousands of dollars on the table.
Refinancing Costs for FHA Loans
Posted by: | CommentsToday when you refinance mortgage loans above 80% loan to value it requires the borrower to pay additional mortgage insurance. Whether the borrower is refinancing conventional or FHA loans, mortgage insurance will be required. Monthly mortgage insurance has risen over the last few years due to the increase in loan defaults. FHA Loan Pros recommends making sure you have included PMI into the loan payments when comparing mortgage refinance offers from conventional and FHA lenders. In addition, homeowners that refinance FHA must pay an additional 2.25% of the FHA loan amount up-front to cover the mortgage insurance premium. FHA is trying to get Congress to pass a bill to increase for the annual mortgage insurance premium rate. It is important that borrowers consider all of the costs when considering the benefits of home refinancing.
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