When to Choose a FHA Mortgage Refinance
For over eighty years, the Federal Housing Administration has been facilitating FHA refinance mortgages for all types of credit, property types and in all 50 states. Refinancing a mortgage can have major implications, so it's important to choose the loan type and lender wisely. The bottom line is that year in and year out, Americans have been successfully getting a mortgage refinance with FHA. If you are searching where to find the best company for a FHA refinance mortgage, this website is a great place to start. We have developed a system to help consumers find the FHA home refinance option that best meets their financial needs. Not all lenders are FHA approved, so when you are shopping companies it is important that you are comparing lending sources that have the HUD stamp of approval to originate FHA mortgages. Is it important for you to find a lender that offers the lowest rates for FHA refinancing? If so then completing a request form to compare refinance offers from competitive FHA mortgage lenders makes sense.
5 Signs When Home Refinancing with FHA Makes Sense
Here are a few reasons why people choose the government for FHA mortgage refinancing:
- If you have credit scores below 620, FHA has become a popular choice for mortgage refinancing. (The minimum fico score is only 500. FHA for bad credit mortgage refinances.
- If you had a bankruptcy over foreclosure in the last 5 years, many people like FHA for home refinancing. You now only need 12 months of loan payments on time to be eligible for a FHA mortgage refinance for poor credit after the BK discharge date of foreclosure.
- If you have a few late payments on your mortgage in the last three years, FHA could be ideal.
- If you have 0 to 5% equity in your house, a FHA mortgage refinance makes sense. Most private lending companies expect borrowers to have 20 to 30% equity, but in today's housing market many people have little or no equity so the fact that FHA only requires 3.5% is huge benefit for refinancing.
- If you want to take money out your property but only have 15% equity (85% LTV), FHA is great for cash out refinancing. Many borrowers like refinancing with FHA because the underwriters see the benefit for them to consolidate 1st and 2nd mortgages. FHA allows cash out to people that want to roll in in high interest charge cards with their mortgage liens.
At BD Nationwide we can help connect you with lenders that offer the best FHA mortgage refinance loans in the business. For more info from top lenders, all you need to do is complete the form below and you will be able to shop and compare mortgage refinance from FHA at no cost.
Why Is FHA Recommended for People with Poor Credit Scores?
In many instances, when the borrower has little or no equity, FHA is the only choice for home refinancing. There is mortgage insurance required on most FHA mortgages so you have to factor in your total housing expenses when comparing your existing situation with an FHA refinance mortgage option. If it saves you more than a few hundred dollars a year, than choosing FHA for a mortgage refinance is likely a good decision. Since 1934 the Federal Housing Administration has been extending FHA home refinance options for people with limited and poor credit scores. FHA has always exemplified fair lending for all Americans. It's hard to find private banks that will take risks like the government will with mortgage refinance loans insured by FHA. Have you researched home refinancing for people with bad credit? With subprime and low fico scores, most paths lead back to FHA for mortgage refinances. Interest rates are competitive and credit standards are far more flexible than Fannie Mae or Freddie Mac finance products.
There are a lot of changes going on with respect to the Federal Housing Administration, so we suggest talking first with lenders that are approved to provide FHA refinance mortgages to people with all types of credit. Before committing to a new mortgage for thirty-years, it makes sense to evaluate your present options with experienced lenders. BD Nationwide makes shopping for FHA mortgage refinance loans a more pleasurable experience. Take a few moments a get a quote from competitive lenders now. There is no obligation and we never charge any application fees.
Pros and Cons Of Mortgage Refinance Loans With FHA
When it comes to getting a loan for a new home, there are a surprising number of options available whether a person is purchasing the very first home or is interested in refinancing the loan that they have for their current house. One of the most popular options out there is to get financing through the FHA, or Federal Housing Administration. The goal of this administration is to keep housing costs affordable so that more people can achieve their goal of home ownership. Although there are plenty of benefits to getting a loan through the FHA, there are also a few cons that a person should be aware of.
One of the biggest benefits that come from FHA mortgages is that the lending standards set by the administration make it possible for a greater number of individuals to qualify for a loan. This means that even a person with a 500 credit score can still qualify for an FHA mortgage refinance. The truth is that there are few lenders out there that can match the lending standards of the Federal Housing Administration. Some of the other pros include:
- Exceptionally low rates
- Less equity is required
Of course, that is not to say that a refinance mortgage with FHA is the right choice for everyone. There are some cons that a person should be aware of including:
- Limited loan amounts
- Mortgage Insurance is required
- Income documentation limitations
In the case of mortgage insurance, this type of coverage is required in order to qualify for FHA refinancing and some homeowners may actually find that their monthly payments are higher due to this added expense. Although an additional $30-$50 may not be a deal breaker for everyone, it is something that a person should keep in mind when trying to decide whether or not the FHA is the right resource when it comes to their refinancing.
FHA mortgage refinance loans are an excellent option to have available, especially if an individual is looking to refinance with less-than-perfect credit. Because most individuals are interested in refinancing their home or in order to get more favorable rates or to lower their monthly payment, comparing different lenders side-by-side in order to find the one that best meets the needs of the individual is the smart way to make a household budget stretch as far as possible. In many cases, a refinance loan through the FHA may be the best choice, but other individuals may find that conventional loans are better suited to them.
|Recent Government Mortgage News
FHA Defaults Declined Last Quarter: According to recent data released by the Department of Housing and Urban Development, delinquencies and defaults fell last quarter on FHA mortgage refinances that were originated in the last 24 months. This is good news for FHA reserves.
President Discusses the Future of Government in the Mortgage Business:
The President made it clear that private money should fund the U.S. home finance market in the future. It's no secret that Federal government has supported the mortgage market in recent years with the FHA, Fannie Mae and Freddie Mac. A Senate bill touched on the President’s goal which would increase FHA mortgage rates between 50 and 75 basis points for a typical American consumer looking to buy or refinance with the FHA.