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You can now refinance your FHA loan with their streamlined
process. With reduced paperwork, your lender can process your
mortgage much quicker. There are some unique requirements to
refinance your FHA loan, but you continued to be backed by the
FHA through this process.
Basic Requirements
In addition to having a good credit record to refinance your
home, the FHA also requires you to already be FHA insured and be
current on your mortgage. Refinancing also has to lower the
borrower's monthly payment, and no equity can be withdrawn.
Refinancing Packages
Financing companies offer a couple of different refinancing
packages for FHA mortgages. A common package offers no up front
payment to refinance. Often these types of mortgages are touted
as "no cost", but you pay higher interest rates for this option.
Another type of refinancing package allows closing costs to be
included as part of the mortgage amount. This option is only
available if there is enough equity in the property, which is
determined by a FHA appraiser.
You can also choose a traditional refinancing package where you
pay loan fees and points up front. This option will give you the
best rates.
Mortgage Terms
In addition to low interest rates, you can save money and build
up your equity faster by choosing a short term loan rate. By
converting from a 30 to 15 year mortgage, you qualify for a
lower rate and reduce you overall interest payments by at least
half.
If you have an adjustable rate mortgage, you can also save on
interest rates in the long term by locking into a fixed rate
mortgage. However, if you think interest rates will fall in the
future, stick with an ARM.
FHA Lenders
Only HUD approved lenders can refinance FHA loans. Fortunately,
most lending companies are HUD approved. You should also compare
rates and fees of these lenders to be sure that you find the
lowest rates and fees.
To save time, use an online mortgage broker to request quotes.
Within a matter minutes you can have a list of lenders with
their rates to compare. From this list you can request more
information from lenders or apply online for speedy processing.
Online lenders will also offer discounts since they have less
overhead costs than traditional financing companies.
About the author:
See my recommended Home
Mortgage Refinance Lenders for the lowest rates online.
Carrie Reeder is the owner of ABC Loan Guide, which offers help
finding low rate home
mortgage loans.
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