May 26, 2016
Not all refinance loans are created equal, and not all FHA refinance loans have the same terms and conditions. Did you know that FHA refinance loans will, depending on the participating lender, allow you to refinance an adjustable rate mortgage (ARM) into a fixed rate but also may permit you to go from one adjustable rate mortgage to a new ARM loan? Qualified borrowers have a variety of refinance options open to them when it comes to rates, loan term, and related concerns.
There are many things to consider when refinancing with an FHA mortgage. For example, you do not have to use your existing lender to refinance. You may shop around for a new lender to refinance your mortgage loan with. You are also not required to have an existing FHA mortgage for certain types of FHA refinance loans.
FHA cash-out or no cash-out refinancing can be for any existing mortgage loan whether conventional, VA, or otherwise non-FHA mortgage in addition to existing FHA loans.
The FHA Streamline Refinancing loan program is for existing FHA mortgages only, so if you have a non-FHA mortgage you’ll nee to explore cash-out or no cash-out FHA refinancing.
The FHA reverse mortgage program is an option for borrowers age 62 or older, but the requirements of this loan include either owning your home or being very close to doing so. However, for those who qualify this is a loan option that can help borrowers take cash back on the refinancing loan and make no monthly mortgage payments. With FHA reverse mortgage loans, the loan is due in full when the borrower dies or sells the property.
Several FHA loans (any refinance loan that features money back to the borrower) will have an occupancy requirement. FHA cash-out refinancing and FHA Reverse Mortgages both have occupancy requirements that are a condition of loan approval. None of the FHA refinance loan options discussed here can be used for investment properties, time shares, vacation homes, or recreational vehicles that aren’t classified as “real property” with a permanent foundation.
FHA refinance loan interest rates may be more favorable to the borrower than the rates of the original home loan. It’s a very good idea to discuss interest rates with a loan officer to see what is available at the time you want to consider refinancing and see what kind of advantage you may have with lower rates, different monthly payments, etc. compared to what you may be dealing with currently.
Never forget that the FHA loan program encourages borrowers to be as fully informed as possible. Always shop around for the best rates, most favorable terms, and a lender that works best for you.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
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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