Refinancing an FHA loan can often save homeowners money. Red Blue Realty's experts are aware that with refinancing, homeowners can lower monthly payments due to lowered interest rates, or convert from a fixed 30-year loan to a fixed rate 15-year loan, building faster home equity. Refinance options can also benefit homeowners with an adjustable mortgage rate who would prefer the long-term stability of a fixed rate conventional loan. Homeowners may find refinancing a convenient way to utilize home equity as well. However, refinancing an FHA loan is only available for homeowners who use their property as a primary residence.
Refinancing is an excellent option for homeowners whose property value has increased since their property was purchased. These homeowners may look for a cash-out option, which allows them to take out a mortgage for a larger amount than that which they currently owe, and receive the balance as cash. This type of loan can be particularly beneficial as homeowners face college expenses for children or medical bills later in life.
Certain options which homeowners may decide upon for refinancing an FHA loan will allow the FHA to offer a streamlined refinancing option. This option allows homeowners to proceed with reducing their home mortgage interest rate quickly, usually without an appraisal. The FHA Streamline Refinance also reduces the paperwork necessary for lenders and borrowers, saving time and money. The FHA has allowed this type of refinancing since the 1980's. While the streamline process does not eliminate fees, it does reduce the documentation and underwriting necessary to complete a loan.
To take advantage of the streamline process for refinance, there are some basic requirements that must be met:
Streamlining an FHA loan can take several different forms. Some mortgage lenders will provide refinances with no out of pocket expenses incurred by the borrower. And note that while in many cases an appraisal can be eliminated, all properties with a rental unit, do require an appraisal before refinancing can commence.
As with any mortgage financing, when refinancing an FHA loan borrowers will need to prepare certain documents for the lender. These can include bank statements, credit reports, pay stubs or W-2's; and tax returns if the borrower is self-employed. The borrower should also be prepared to address any credit blemishes on his or her credit report, such as late pays. Bank statements must usually be verified, and the borrower can make the refinance process move more swiftly by providing bank statements for the preceding three month period to the lender.
Regardless of what type of refinancing option a borrower chooses, the benefits of refinancing an FHA loan can be substantial. To start the process, contact FHA approved lenders.
Refinancing is an excellent option for homeowners whose property value has increased since their property was purchased. These homeowners may look for a cash-out option, which allows them to take out a mortgage for a larger amount than that which they currently owe, and receive the balance as cash. This type of loan can be particularly beneficial as homeowners face college expenses for children or medical bills later in life.
Certain options which homeowners may decide upon for refinancing an FHA loan will allow the FHA to offer a streamlined refinancing option. This option allows homeowners to proceed with reducing their home mortgage interest rate quickly, usually without an appraisal. The FHA Streamline Refinance also reduces the paperwork necessary for lenders and borrowers, saving time and money. The FHA has allowed this type of refinancing since the 1980's. While the streamline process does not eliminate fees, it does reduce the documentation and underwriting necessary to complete a loan.
To take advantage of the streamline process for refinance, there are some basic requirements that must be met:
- the mortgage must be FHA insured.
- the mortgage must be current, with no delinquent payments
- the refinance process lowers the borrower's principal and interest payments
- the refinance converts an adjustable rate mortgage (ARM) to a fixed-rate   conventional mortgage.
- no cash-out options are available to take advantage of this process
Streamlining an FHA loan can take several different forms. Some mortgage lenders will provide refinances with no out of pocket expenses incurred by the borrower. And note that while in many cases an appraisal can be eliminated, all properties with a rental unit, do require an appraisal before refinancing can commence.
As with any mortgage financing, when refinancing an FHA loan borrowers will need to prepare certain documents for the lender. These can include bank statements, credit reports, pay stubs or W-2's; and tax returns if the borrower is self-employed. The borrower should also be prepared to address any credit blemishes on his or her credit report, such as late pays. Bank statements must usually be verified, and the borrower can make the refinance process move more swiftly by providing bank statements for the preceding three month period to the lender.
Regardless of what type of refinancing option a borrower chooses, the benefits of refinancing an FHA loan can be substantial. To start the process, contact FHA approved lenders.
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