May 8, 2015
A reader asks, “I bought my home in 2009. Its a FHA mortgage. I do not qualify to refinance because paperwork and case number were assigned after may 1 2009. I need to know what I can do to refinance with a FHA mortgage I need to Lower my payments, smaller interest rate shorten time on contract I feel like im stuck. There has to be a way to get this done.”
It’s not clear why this reader believes an FHA home loan isn’t eligible to be refinanced because of the date of the case number–qualified borrowers are free to apply for FHA refinancing for their home loans regardless of the date of the case number, provided a minimum of six months and six mortgage payments have been made.
That’s the FHA minimum standard, individual lenders may require different, longer waiting periods for a new loan…but the bottom line is that it is not true that a borrower cannot apply for an FHA refinance loan just because the case number was assigned on or after May 1, 2009.
It’s possible the reader was thinking of certain types of home loan modification programs, foreclosure avoidance, or other plans designed to help certain borrowers keep their home rather than go into loan default or foreclosure. But in general, all borrowers can apply to refinance their FHA loans. One very important factor for borrowers who want to apply for refinance loans when their original loan is a year old or less? Consistent payments.
FHA loan rules require borrowers to be current on the mortgage being refinanced, or to be brought current depending on qualifying circumstances. You are never allowed to skip payments on an FHA mortgage when refinancing; FHA loan rules require your loan to either include the missed payments in the new loan or have the amount paid up front before the loan can close.
The reader’s question does raise one important issue; never assume you are ineligible for an FHA loan or refinance loan. It’s always best to speak with a loan officer about your circumstances to see what might be possible. Simply assuming you cannot get a new loan could hurt you. New programs, standards, and qualification rules may have been introduced since your original home loan that make you eligible for certain refinance programs, foreclosure avoidance or other assistance.
Do you have questions about FHA loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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