FHA Refinance Loans – Good Choice for Home Owners
Are you one of those who are affected by Sub Prime Woes or ARM resets? Well, there is a solution for paying your monthly mortgage bills smartly. The solution is FHA mortgage refinance.
Using the FHA refinance loan, not only you can refinance your mortgage in a bid to get a reasonable monthly payment, but also refinance your existing loans to help avoid the prospect of foreclosure. This type of refinance will also enable you to get access to convert the equity on your home into cash, for home improvements.
The Benefits of FHA Refinancing
You must get in touch with a mortgage company to know more about the benefits of the refinance option offered by the FHA.
Some of these benefits are:
» Easy to Qualify
The FHA refinancing loan is easier to qualify for, than the conventional loans offered by mortgage companies. The FHA ensures the loans against the prospect of default by the borrower. Moreover, the FHA has configured these loans in such a way that the people find it easier to qualify. As borrowers are offered low interest rates, they have to make lower monthly payments.
» Perfect Credit is not Mandatory
The FHA has pre-determined and pre-designated set of standards that you must qualify for, before you can apply for a FHA refinance. However, as lenders are within the safety net of the FHA, they offer loans to even those borrowers who want FHA mortgage refinance but do not have a good credit score.
» The Prospect of Very Little Down Payment
FHA refinance is available for a minimum down payment and it goes down to as low as 3%, while the normal market rate is around 20%. Moreover, this down payment could be given as a gift to you from various sources.
Conventionally, lenders do not allow funds that have been a gift, to be used as a down payment. This means that even if you do not have the necessary savings to make a down payment, under the aegis of FHA refinancing loans you can borrow that amount from your friends and relatives.
» FHA Mortgage Refinance is Offered at a Lower Interest Rate
This is an offshoot of the first point. When it comes to FHA refinance, the loan as well as refinance is insured by FHA and hence the lower interest rates. Therefore, the lenders know that even if the borrower defaults, they are not going to lose any money. This innate security enables them to offer a FHA refinancing loan at much lower rates than conventional loans.
All these benefits put together make FHA refinance loans a great option when looking to refinance your mortgage. So give a thorough look into before making your choice.