There are many reasons to refinance your FHA home loan, so FHA gives you options. You may wish to pull some equity out of your home, making it work for you after years of putting money into it. Some of the objectives you may have to refinance are that you want to consolidate your credit card bills. If you need to make some improvements on your home or you have a child that is headed off to college you may want to look at getting a new loan. Weddings, vacations or a new car may also be some of the reasons as well.
Whatever your needs are this is a great time to decide to refinance. One qualification that you must meet to be eligible to refinance with FHA is that the home is your primary residence. You should have owned the home for at least one year. The longer you have owned the home the more equity you would have built up. If your property values have increased substantially you will be in very fine shape to refinance.
The first type of refinancing loan you can get with FHA is called a Cash Out Refinancing loan. This particular FHA loan is great refinance fha loan for those lucky homeowners with an increase in property value. You can not only pay off the existing mortgage, but you can realize some extra cash. The refinance loan will allow you to obtain up to 85 percent of the property value along with your states closing costs.
If you are looking for a lower interest rate without using any of the value of your home you will qualify for the FHA Streamlined Refinancing. This option is faster than any other type of FHA loan. The paperwork is reduced and you may not even need to have an appraisal done. It has been designed to lower your interest rate quickly.
To achieve this refinance option you must be current on your loan payments and have very little debt. Should you meet these qualifications you stand a good chance of acquiring a refinance of your FHA loan. Generally speaking you won’t have to have a credit check, income verification or a qualifying debt to income ratio. Your lender will be able to provide you with the proper information about refinancing your loan. Every situation is different, of course, but these are the basic parameters.
The pluses of refinancing your FHA loan are as varied as there are people applying for them. You should define your needs for seeking a refinance option. Whatever type of FHA refinance loan you are thinking about should be decided before you contact your lender. You will also want to check with more than one lender. While you should get your best interest rates from the lender you have at the time, it may not always be true. Competition for loans is still high in this segment of the industry. So choose wisely when you have made the decision to refinance your FHA loan.