Facts About an FHA Home Loan Refinance

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Just as a regular FHA loan is easy to get, an FHA home loan refinance is also an easy process. For homeowners that have an existing FHA loan, the option to refinance is available. The truth is that refinancing an FHA loan offers the homeowner with many great benefits.For one thing, the homeowner could choose an FHA home loan refinance as a means of cashing out as much as 85% of the property’s value. In this case, the homeowner would have the opportunity to consolidate bills, as well as a first and second mortgage. Additionally, monthly payments are more affordable and the person now has a single loan to manage. If you elect to consolidate other loans when you refinance, your monthly payment may end up higher, but you are paying off more than one debt at a time in this capacity. This option is also helpful for making it easier to qualify for credit because it doesn’t appear that you have a high debt to income ratio and typically, closing costs are low since they are regulated by the government.Another top option associated with an FHA home loan refinance is taking up to 96.5% of the home’s value. In this case, the person would have the opportunity to consolidate a first and second mortgage but for this type of refinance loan, the person would not need any credit or would need a score at least 620. For this option pertaining to an FHA home loan refinance, if the person had a bankruptcy, he or she would qualify as long as it was two years old. Even someone with a foreclosure would qualify as long as it is reported at least three years old or more. An FHA home loan refinance can make life much easier with those that have little to no credit or those that are looking to improve the appearance of their credit after a bankruptcy or foreclosure.One of the most popular types of FHA home loan refinance is known as the streamline loan. With this, the borrower has a no cost interest rate reduction, no qualification required for credit, zero cost options for refinancing, better credit qualification, and the person could switch to a shorter or longer loan term or go to an FRM from an ARM with no hassle.To qualify for a streamlined refinance, the loan must be in good standing and by refinancing your monthly interest payments should become lower as well. The goal of this FHA home loan refinances to reduce your monthly expenses by lowering your monthly payment. However, this refinance option does not allow you to receive cash back. This is a good choice for people that have good credit and do not have any significant additional debt. By selecting this option, the homeowner is able to save a little extra money each month.Regardless of your reason for an FHA home loan refinance, you will find that there are various options available to you. By refinancing your home, you may be able to consolidate debt and pay it off more quickly, or you may save yourself extra cash each month that you can put to use elsewhere.