|
The FHA Home Loan Company developed an online marketplace for homeowners to research; qualify and apply for the lowest FHA refinance rates available in the nation.
As a result of the government takeover of Fannie Mae and Freddie Mac, interest rates on both 30-year and 15-year mortgages have dropped sharply. Freddie Mac reported Thursday that its nationwide survey found that 30-year mortgage rates for fixed-rate loans dipped to 5.93 percent this week, down from 6.35 percent last week. And, fell to 5.54 percent, down from 5.90 percent last week. FHA’s lending standards aren’t anywhere near as strict as those of conventional loans. Like Fannie Mae and Freddie Mac loans, the interest rates for FHA loans have also dropped. If you haven’t had any late payments reported late in the past 12 months, and you have a FICO score of at least 580, you could be eligible for a FHA loan. And, equity requirements aren’t as strict for a FHA refinance, either. There are several options for your FHA mortgage refinance.
Perfect Time for a Refinance
Now is the perfect time for refinancing your adjustable rate mortgage. But the one thing that didn’t change with the takeover: the very strict lending requirements. Lending standards for conforming Fannie Mae and Freddie Mac loans are still very tight so while the rates have improved, it may still be difficult for some people to qualify you need a FICO credit score of at least 660 if you’re putting 20% down and at least 700 if you’re starting off with less than 20% equity. Refinancing under conventional loans is still tough, too. About 80% loan to value (LTV) is typically required, and you need good credit. So, what are your options if you’re not active duty or ex-military? You should deeply consider FHA.
Cash Out Mortgage Refinancing
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by taking out another mortgage for more than they currently owe. This allows the homeowner to access the equity they have built up in their home and use it for making improvements, consolidating debts or for other purposes. If the property was purchased more than one year prior to the refinance, the homeowner can refinance the existing mortgage for up to 85 percent of the appraised value plus the allowable closing costs, which vary from state to state.
FHA Streamline
The FHA Streamline refinance is considered streamlined because there is typically no credit underwriting or appraisal, and there is less paperwork involved with the loan. Its sole purpose is to provide you with a quick way to get more favorable rates and terms, which is why it's known as a rate and term refinance. These are the basic eligibility requirements for a Streamline refinance:
The Streamline loan has:
- No appraisal in most cases;
- No credit underwriting in most cases;
- No qualifying debt ratios;
- No Income verification;
- And, no face-to-face application. It can all be done over the phone.
The only thing is that FHA Streamline loan doesn't allow you to get any more than $500 cash back.
"No Cost" Refinance
There is the no cost refinance, which refers to no-out-of-pockets costs for the refinancing. What generally happens on a no cost refinance is the lender will charge a higher interest rate. If there are any closing costs paid for or refinanced by the borrower the lender will then pay any closing costs or other costs incurred during the transaction.
|
