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How can FHA help me? FHA Refinance Programs Homeowners enjoy the benefits of investing in their property year after year. For some, there comes a time when that investment can come in handy. Refinancing with an FHA loan can prove to be an effective way to put that equity to work.
Sending a child to college, consolidating bills, taking a much needed vacation, or making home improvements are some of the ways homeowners tap into the equity they have accumulated in their home to help with these expenses. Keep in mind that FHA refinancing is only available to homeowners who are currently using their home as their principal residence. FHA offers several different options to homeowners who are considering refinancing their current mortgage: RATE AND TERM REFINANCE
Are you currently in a Adjustable Rate Loan? Do you currently have a first and a second you want to combine into one new loan? If so, and you don't have much equity in the home, then an FHA rate and term refinance is the perfect solution. With a rate and term FHA loan you can qualify up to 97% of the value of your home to pay off an existing first or first and second mortgage. This loan is a 30 year fixed product with the same low interest rate offered on all other FHA fixed products. Qualifying is easy and the process only takes about a week. Click here to contact us or apply now CASH OUT REFINANCING
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A Cash Out refinance allows homeowners to refinance their existing mortgage by taking out another mortgage for more than they currently owe, therefore repaying their current mortgage and using the equity they have built up in their home to take out another larger mortgage. This allows the homeowner to access the equity they have built up in their home and put it to good use where needed. In order to get the most benefit from refinancing your mortgage, it is often best to consider refinancing after you have had time to build up a significant amount of equity in your home. If the property was purchased more than one year prior to the refinance, the homeowner can refinance the existing mortgage for up to 85 percent of the appraised value plus the allowable closing costs, which vary from state to state. Click here to contact us or apply now STREAMLINED REFINANCING
This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed so it saves you valuable time and money.  In order to qualify for a Streamlined Refinance your original home loan must be an FHA loan in good standing and the refinance must lower your monthly interest payments. This type of refinancing option reduces your monthly expenses by lowering your payments but there is no option to receive cash back. This works well for people who are in good financial standing with no significant debt because it allows you a little extra money each month that can be put to good use elsewhere. Plus, there is no limits to how many times this can be done, making it a very simple and quick way to getting that better rate. Click here to contact us or apply now How can the FHA assist me in buying a home?
The FHA works to make homeownership a possibility for more Americans. With the FHA, you don't need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by requiring smaller down payments than conventional loans. In fact, an FHA down payment could be as little as a few months rent. And your monthly payments may not be much more than rent. Click here to contact us or apply now Who can qualify for FHA loans? Anyone who meets the credit requirements can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan. Click here to contact us or apply now What is the FHA loan limit? FHA loan limits vary throughout the country. The loan maximums for multi-unit homes are higher than those for single units and also vary by area.
Because these maximums are linked to the conforming loan limit and average area home prices, FHA loan limits are periodically subject to change. Click here for loan limits in Colorado. What are the steps involved in the FHA loan process? With the exception of a few additional forms, the FHA loan application process is similar to that of a conventional loan. With new automation measures, FHA loans may be originated more quickly than before. And, if you don't prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone, the Internet, or video conference. Click here to contact us or apply now How much income do I need to have to qualify for an FHA loan? There is no minimum income requirement. But you must prove steady income for at least two years, and demonstrate that you've consistently paid your bills on time. Click here to contact us or apply now What qualifies as an income source for the FHA? Seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family all qualify as income sources. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association - qualify, too. Income type is not as important as income steadiness with the FHA. Click here to contact us or apply now Can I carry debt and still qualify for the FHA loans? Yes. Short-term debt doesn't count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio. Click here to contact us or apply now What is the debt-to-income ratio for FHA loans? The FHA allows you to use 29% of your income towards housing costs and 50% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt. Click here to contact us or apply now Can I exceed this ratio? You may qualify to exceed if you have:
• a demonstrated ability to pay more toward your housing expenses • substantial cash reserves • net worth enough to repay the mortgage regardless of income • evidence of acceptable credit history or limited credit use • less-than-maximum mortgage terms • funds provided by an organization • a decrease in monthly housing expenses How large a down payment do I need with an FHA loan? You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders today require between a 10%-20% down payment, with a minimum of 10% coming directly from the borrower's own funds. Click here to contact us or apply now What can I use to pay the down payment and closing costs of an FHA loan? Besides your own funds, you may use cash gifts or money from a private savings club. If you can do certain repairs and improvements yourself, your labor may be used as part of a down 8 payment (called -sweat equity"). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash. Click here to contact us or apply now How does my credit history impact my ability to qualify? The FHA is generally more flexible than conventional lenders in its qualifying guidelines. In fact, the FHA allows you to re-establish credit if:
• all judgments have been paid. • any outstanding tax liens have been satisfied or appropriate arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue. • three years have passed since a foreclosure or a deed-in-lieu has been resolved. Can I quaify for an FHA loan without a credit history? Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details. Click here to contact us or apply now What types of closing costs are associated with FHA-Insured loans? Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan outlined in Question 63. The FHA requires a single, up-front mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program- see Question 91). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium - paid monthly - if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%. Click here to contact us or apply now Can I roll closing costs into my FHA loan? No. Though you can't roll closing costs into your FHA loan, you may be able to use the amount you pay for them to help satisfy the down payment requirement. Ask us for details. Click here to contact us or apply now Are FHA loans assumable? Yes. You can assume an existing FHA-insured loan, or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. In this way, qualifying to assume a loan is similar to the qualification requirements for a new one. Click here to contact us or apply now FHA Secure (Recently Introduced by FHA) This program helps homeowners who have fallen behind on there house payments as a result of originally taking out an adjustable rate mortgage or sub prime mortgage. Traditionally these homeowners would not be able to qualify into an FHA refinance if they were over 30 days late on their mortgage payment. Under the new proposal you may be eligible if you can prove your late payments were a result of your interest rate adjusting from your original variable rate loan. You must still qualify for the loan using the FHA qualifying requirements which include debt to income and employment history. Click here to contact us or apply now
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Disclaimer- Community One Financial is a private mortgage company specializing in FHA Home Loans and is not owned or operated by the federal government or HUD/FHA. |