What is FHA Home Loan Modification Exactly?

Do you have less than perfect credit? Good news this company gives some leeway even if you have filed for bankruptcy. The minimum credit score you can have is 500. This was recently changed from a no minimum. There is a minimum down payment of 3.5% of the homes perches price. To help you pay This company will allow the use of state or local government assistant programs to help. This is by far the most flexible program.There are great benefits to this type of loan Modification company. One is that closing costs may be covered. Home sellers,builder and lenders pay some or all of the borrowers closing costs such as appraisal, credit report, and title. Lenders typical charge higher interest rates on loans they pay the closing costs on though. Other benefits include:lower monthly payments and interest rates, better terms(15 to 30 years) and equity building,streamlined paperwork that reduced documentation,low down payments,cash out options for other expenses and debt consolidation, this is called a 203(k) and is based on the value of the home once repairs are done, more access to other credit lines and little to no out-of-pocket expense needs.There are four conditions however, that borrowers need to satisfy. You have to have lived in you home for at least a year before cashing out refinances options previously listed. The refinance amount you qualify for is determined by the appraised value of your home. If you have an original mortgage and a 2nd mortgage you will have to show that so they can take them into consideration. Also if you have a FHA streamline loan the existing mortgage would be paid off with a new refinanced loan and no cash is granted. There are 2 mortgage insurance premiums required on all FHA loans:the upfront premium and the annual premium. The upfront should be paid then the borrower get the loan but, can also be financed as part of the loan. The annual premium will be paid in chunks. 1/12th of the amount will be paid each month with the mortgage payment. Compare this to a non-FHA loan and this will still be the best way to go.The FHA provides 4 types of home refinance loans. There is a cash out refinance loan that allows you to refinance 85% of the appraised value of your home. There is also a cash our refinance option that allows you to refinance 95% of the appraised value of your home. Both of these allow you to wipe away your high interest debt to get a clean start or pay for other expenses such as medical debt, home improvement, student loans or any other major expenses that you might have. There is a no cash out refinance loan alternative. This can eliminate upfront costs by rolling all related closing costs, financing costs and prepaid items into the new loan amount. Finlay there is a FHA stream line loan. This option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. This also cuts down on the amount of paperwork that will be completed by your lender saving you time and money.Remember when researching that FHA is not a lender but rather an insurance fund you need to get on your loan. To get this insurance on you loan you must get your loan threw FHA-approved lender rather then from the FHA its self. So you will need to look up and approved lender in your area. Make sure your trust this lender.

FHA Short Refinance Opportunity for Underwater Homeowners

A review of the FHA updated guidelines to the short refinance modification for struggling homeowners who are current but have lost value in their home.With the ever increasing rates of foreclosures and homeowners walking away from their homes, the government has announced a revision to the short refinance modification. Announced back in March 2009 the Home Affordable Modification Program has helped thousands of struggling home owners to stay in their home. However, there is still certain areas of the country that has seen such a devaluation of their property that these homeowners are choosing to walk away. Below are some of the basic requirements for this new short refinance modification.
Must be current on your mortgage
Have a non FHA government mortgage loan
Must be your primary residence
A minimum credit score of 500
First mortgage lien must be willing to write of 10% of mortgage principal reduction
Loan to value ratio should be no more than 97.75 %
2nd lien’s must be willing to agree to full and or partial write off
This new short refinance will only be available to those homeowners whose lenders are willing to participate and are in the targeted areas. IF you cannot keep your home and refinancing is not an option you may want to consider applying for a loan modification. In some cases, lender’s may reduce principal as part of the loan modification. However, it is very far and it is not a common practice with lenders, but you may get some assistance by exploring your options and knowing your rights.