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FHA Home Loan
The main purpose of an FHA Refinance Loan is to help the home owner reduce their monthly payments. They may be refinancing an non-FHA loan or an FHA loan. There is also the FHA Cash Out Refinancing and the FHA Streamline Refinance Loan (only available to FHA Mortgage holders) programs available to consolidate all bills or take cash out of the property or just lower interest rates and payments.
FHA refinancing is used for a non-FHA loan. If the borrower has a conventional mortgage the loan can be up to 97.75% of the value of the property provided no cash at closing is received from the loan and that nothing other than the existing mortgage is being paid.
The loan funds can include the first mortgage, a second mortgage any junior liens over 12 months old, closing costs, prepaid expenses, borrower paid repairs required by the appraisal, discount points and any prepayment penalties assessed on a conventional mortgage.
If you want to know more about FHA Refinancing give us a call at 866.998.9698.
FHA Streamline Refinance Loan
There are a number of FHA Refinancing programs, each with their own rules, limits and requirements.
There is the refinancing of a non-FHA loan with a new FHA loan to lower interest costs, this is called FHA Streamline Refinance Loan. You can have the mortgage company wrap the costs into the new mortgage amount, providing no out of pocket expenses for the new mortgage, as long as it results in lower payments. This is a very smooth process with limited documentation required if you are current with your loan payments and have never been delinquent.
There are different requirements for Delinquent FHA Streamline Refinance Loans. This will require full qualifying. Once the FHA to FAH full qualifying refinance is insured, borrowers are able to take advantage of FHA’s Streamlining Refinance Program provided they can meet the following requirements.
- The mortgage being replace must be at least 6 months old, having made 6 payments and it must be an FHA mortgage.
- If the mortgage is only 12 months old there can be no delinquent payments within the past 12 months
- If the mortgage is more than 12 months old there can be no late payments within the past 90 days.
- There must be a lowering of the mortgage payment by at least 5%
- The borrower may not receive cash proceeds in excess of $500
- Any assets needed to close the loan must be verified
- Proof of employment and income are required
- The home owner cannot extend the term of the loan from 15 years to 30 years to lower the loan payment
- An appraisal is required if the closing costs are wrapped into the loan.
- No termite report is required.
If you want to know more about FHA Streamline Refinancing give us a call at 866.998.9698.
FHA Cash-Out Refinancing
A Cash-Out FHA loan allows the home owner of more than one year, refinance owner occupied principals residences up to 85% of the appraised value and not to exceed $417,000.00. If the base loan amount is greater than $417,000.00 then the maximum loan to value is limited to 85% and requires a second appraisal.
The purpose of this loan is to allow the home owner to refinance their current mortgage for more than they owe in order to pull out the built up equity that has accrued in their home. There are certain requirements for this type of loan.
- Borrower cannot be delinquent or in arrears on their current mortgage
- Borrower must have owned the home more than 12 months
- Must be an owner occupied property
- Can only be a one unit or two unit dwelling
- Loan amounts cannot exceed loan limits for the area
- All borrowers must be credit qualified
- No borrowers or co-signers can be non-occupants of the property
If you want to know more about FHA Cash-Out Refinancing give us a call at 866.998.9698.