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FHA Refinancing
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There has been quite a bit of news as of late regarding FHA Refinancing, particularly since President Bush announced the new FHASecure Initiative. FHA Refinancing is a great way to pay off a current adjustable rate mortgage or to take cash-out up to a 95% Loan-to-Value on a property. We will be taking a look at the various niches FHA refinancing offers and how an FHA loan could put one in a much better financial position.FHA refinancing can be done on a property with deferred maintenance or in the middle of getting work done through an FHA 203k or FHA Streamline K refinance. Most conventional loans will not loan on a property that is "subject to" repairs being completed.
FHA insured mortgages are offered with full income and assets documentation. There are no "stated income" or "no doc" FHA loans. Homeowners must provide W2's and tax returns with sufficient income to prove affordability.
Contrary to popular belief, you can still qualify for an FHA loan with previous mortgage lates. With a viable explanation for your past late payments such as an accident or an illness, you can be approved today. Of course the loan to value that you qualify for will be reduced some, it's a small price to pay. But if you have an adjustable rate mortgage or you need to consolidate debt or you simply just need to save money by reducing your rate, FHA is the way to go.
FHA Refinancing also makes considerable allowances for owner-occupied 2-4 unit properties. 1-2 unit properties allow for a cash-out refinance of up to 95% of the properties appraised value, and 3-4 unit properties can cash-out of to 85% of their appraised value. Cash-out refers to any proceeds used to pay of consumer debt, non-purchase money 2nd liens, or cash in hand.
FHA loans can't be used for investment properties or second homes.
One benefit of FHA Refinancing is that FHA loans are not credit score driven like most conventional loans. A strong 12 month mortgage credit history is required, however, there is not a minimum credit score which must be exceeded to qualify for a loan. Compensating factors such as paying off an Adjustable Rate Mortgage (ARM) or lowering your monthly debt load are weighed heavily as well.
The new FHASecure Initiative has been designed specifically to help homeowners with Adjustable Rate Mortagages who have fallen behind on their mortgage payments since their adjusted upward. The payments need to have been current during the fixed portion of the loan. Up to 6 months delinquent payments may be allowed to be rolled into the new loan if one qualifies. Contact at or for more information to see if you qualify.
FHA refinancing is a great option if you own a property with a manufactured home as well. The manufactured home needs to be on a permanent foundation and meet HUD's guidleines to qualify. Ask your mortgage professional for the guidelines for FHA loans on manufactured housing.
FHA refinancing can be done to pay off high rate owner financing or bank balloon notes on manufactured homes provided the home and the foundation meet HUD guidelines.
Fha Refinancing in the News:
| Subprime Lending Crisis: Auto Loans Thrive, Housing Down (Time Magazine) |
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In the wake of the credit crisis, banks have scaled back lending to subprime borrowers. But other lenders have stepped in, making high-interest-rate loans to borrowers with low credit scores
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| McCue Mortgage still in the family after 60 years (The Bristol Press) |
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New Britain-based McCue Mortgage Co., the largest independently-owned mortgage lender in the state, celebrates 60 years in business this year.
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| Folding in the fix-up (Ventura County Star) |
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WALNUT CREEK — The word “as-is” can indeed be one scary phrase, especially when buying a home in today’s market where foreclosures and short sales that need fix-up work are plentiful.But a little-known Federal Housing Administration loan program that’s been around since 1978 can help take the sting out of “as-is.” Only 219 borrowers took advantage of the FHA’s 203(k) program in 2009. Not that ...
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| Refinancings decline in Mississippi (The Clarion-Ledger) |
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Last year, record low interest rates drove home refinancing, but Mississippians appear to have hopped off the bandwagon.
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| Realities of Real Estate: Real estate odds and ends (The Capital) |
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Every so often we run across important tidbits of information that, despite our gift for gab, don't have enough meat to make up an entire column. So, we thought we'd gang together a few unrelated topics that you might find useful or interesting.
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Fha Refinancing on the Web: