July 6, 2017
Who should get an FHA Loan? There are many reasons why you might want to explore your FHA loan options, and not all of them involve the need to purchase a new home. FHA loans are for both house hunters and those who are looking to refinance. The options you choose will depend on your financial needs and goals.
FHA Loans Are For Refinancing, Too
FHA refinance loans are an excellent choice for those who want to refinance. FHA loans can refinance existing FHA mortgages, but also non-FHA loans such as VA or conventional mortgages.
Refinancing into an FHA mortgage has an even bigger advantage if you are currently in a non-FHA mortgage with an adjustable rate. You can refinance into a fixed-rate FHA home loan and get the benefit of a predictable monthly payment for the duration of the loan.
FHA Loans Can Be Refinanced Into Lower Mortgage Payments
Borrowers with existing FHA mortgages can refinance their FHA loans with the FHA Streamline Refinance loan option, which typically requires a lower payment, lower interest rate, or some other tangible benefit. FHA-to-FHA Streamline Refinance loans can help cut the monthly cost of your mortgage and free up money for other needs.
FHA Loans Feature Fixed Rates AND Adjustable Rates
Borrowers have the option of choosing an adjustable rate FHA mortgage, also known as an FHA ARM loan. Adjustable rates have specific rules that govern the amount of the adjustments, the maximum number of those adjustments, and clearly defined terms for introductory interest rates depending on the duration of that introductory rate.
A fixed-rate mortgage is an advantage if you are sure you want to stay in the home for the duration of the home loan term. An adjustable rate mortgage may be helpful for those who may sell the property down the road and move into a new home. FHA ARM loans may also be helpful for those who have a long-term strategy for buying and refinancing their home loan.
FHA Loans Are For Those Who Want Reverse Mortgages
Qualified borrowers aged 62 or older who either own their property outright or are very close to doing so may qualify for an FHA Reverse Mortgage, also known as a Home Equity Conversion Mortgage or FHA HECM loan. Reverse Mortgages feature no monthly payment and offer cash out to the borrower based on the terms and conditions agreed upon for the FHA HECM.
Like most other FHA loans, FHA reverse mortgages have an occupancy requirement and you must agree to stay current on all property taxes and other financial obligations associated with home ownership. Ask your loan officer about FHA reverse mortgage options to determine if this is an option right for you.
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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