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Benefits of a FHA Refinance |
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Weaker credit scores? Need a high loan-to-value? Our FHA loan could be exactly whatyou need. You canrefinance your current loan for whatever reason using our FHAloans. Use our FHA loan to take cash out of yourhome's equity for home improvements, energy-efficient
improvements, renovations, and more. The question is: With many otherlenders and loans available in the refinancing market that all offer the same options, why should you refinance with an FHA loan? |
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| Benefits of a FHA Refinance |
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It is easier to qualify for an FHA refinancing loan than it is for a traditional loan “conforming” loan from Fannie Mae and Freddie Mac lenders (we do these too!).
The FHA insures our loan. Since the FHA does not directly loan you the money,
it is easier to qualify because the FHA guarantees our loan, which means that they
guarantee us that if you skip a mortgage payment, go into default (90 days late),
or we are forced to foreclose on the property, that we will get our money back.
The FHA guarantees a percentage of the loan, which they pay directly to us as
lender in the case of foreclosure. So, we have far less to lose by extending credit
for a mortgage loan to a borrower who chooses an FHA loan. |
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You do not have to have perfect credit to refinance with our FHA loan. The FHA
requires certain standards in order to offer us loan insurance, but as lender we are still guaranteed certain money in case of foreclosure, so we are more likely to
fund the loan even if your credit is not ideal. |
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You can have no down payment or a very low down payment, and still get a
mortgage loan. With sub-prime lending and second mortgage financing mostly
gone, most traditional lenders require a larger down payment. Our FHA loans
only require that you have or can get 3% of the purchase price. This small amount can be a gift to you from a relative, or from your employer or from some other approved source--including a down payment gift program such as AmeriDream. If you are refinancing, you would be able to take more cash out
from your home, or refinance sooner, even if you have a small amount of equity
built up in your home. |
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You may get a much lower interest rate on your refinance mortgage. FHA loans
can offer much better loan terms than sub-prime mortgage loans because the loans are guaranteed by the federal government, so there is almost no risk involved. Because of the guarantee, as lender we are more secure with the loan and can offer lower long-term fixed interest rates and fewer points. |
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The FHA will stand by you in case of an emergency. Most programs help you get
your mortgage loan, and then leave you on your own. Your mortgage may even
be sold to other companies, and you would never deal with your original lender
again. The FHA stays with you for the life of your loan, and they can help you if
you get in trouble. If for any reason you get to the point of default or foreclosure
on your home, you should contact the FHA immediately. The FHA has programs
that can help you retain ownership of your home in times of crisis. |
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| These are just some of the many benefits you would receive if you refinance your home using an FHA loan. Keep in mind that because the FHA does allow you to put such a small percentage down on your mortgage loan and take out a lot of cash when you refinance, you are required to carry mortgage insurance on your home until the equity in your property has built up to 20% or more. |
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| An FHA loan can allow you to include the costs of your home improvements in your loan. The FHA 203(k) program allows you to purchase or refinance a home that needs improvements and include all repair and improvement costs in the loan. |
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| FHA loans can even help you to make your home more energy-efficient. The FHA recognizes that with a more energy-efficient home, the homeowner can afford to pay a higher mortgage; therefore, the FHA can also include these types of repairs in the original loan also. |
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| If you are considering refinancing your home mortgage loan, you may want to research an FHA refinancing loan. You can learn more Department of Housing and Urban Development. |
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| Get information about FHA Streamline Refinancing, or FHA Credit Issues. |
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