Many homeowners have turned to government mortgage loans, like FHA for refinancing a mortgage. There are several types of FHA loan refinances, but the FHA streamline and the cash out refinance are the two most common options in 2011. FHA offers a wide variety of refinance choices for qualified borrowers. Lenders like FHA refinancing because the U.S. government insures the mortgages and the underwriting is more flexible than most traditional loan programs.  Homeowners choose FHA for refinancing because the enable all types of credit and do not require much equity for loan qualifying purposes.  The other reason FHA loan refinancing has risen in popularity is because the today’s FHA mortgage rates are at all-time lows.  Homeowners can save thousands of dollars a year if they refinance a mortgage that currently has an interest rate higher than 5.5 or 6%.

• Standard FHA Refinance
• Cash Out loans
• FHA Streamlines
• Home Rehabilitation
• Energy Efficiency

The cost for FHA refinancing will vary depending on the rate and the lender.  In most cases borrowers will finance the lending fees in the loan, so they do not have to come out of pocket and pay the lending fees at closing.  The FHA streamline loan program does not allow homeowners to finance the fees in the loan. Streamline borrowers must pay for closing costs out of their pocket unless they can convince the lender to cover their closing costs.  No cost mortgage refinancing with FHA is an option with some lenders, but you will pay a higher FHA rate, so make sure that it is worth it.

If you are saving a significant amount monthly or converting an adjustable to a fixed rate then refinancing likely makes sense financially.  When you are shopping for a FHA refinance loan, always compare the rates, fees and total costs when deciding which FHA lender to go with. There are many reasons you should refinance now, rather than wait on the sidelines. First of all, economists are forecasting higher interest rates in 2011 and 2012. Many mortgage insiders believe that Congress will reduce the FHA loan limits for 2012. If the government lowers the 2011 FHA loan limits than less people will be eligible to use FHA for refinancing. Bottom line is that if you can save money now, refinancing is worth your time and efforts.