FHA Simple Refinance
With an FHA Simple Refinance, homeowners with a current FHA Loan can refinance into a new one, whether it's a fixed-rate loan or an ARM. The Simple Refinance has no cash-out option and is the most straightforward; lenders require a credit qualification, which is the process of analyzing credit, income, and assets to ensure the borrower meets the requirements for the new loan terms. There is also a home appraisal, to assess the current home value. With an FHA Simple Refinance, the new loan amount can include all closing costs and prepaid items, as long as the amount falls within the appraised value.
Who Can Apply?
It might seem obvious, but to qualify for an FHA Simple Refinance, there must be a calculable benefit from refinancing. A Simple Refinance is only applicable on an owner-occupied principal residence or HUD-approved secondary residences. Borrowers must also be current in their loan payments for the previous 6 months to be considered eligible for a refinance.
Benefits of Refinancing Your Home
Refinancing some time and money on your part, so it's important to ask yourself if you'll be benefitting from the process. Here are some of the reasons borrowers choose to refinance their homes.
- Lower interest rates mean a smaller monthly payment. If you're in need of a little more disposable income every month, refinancing for a lower rate may be to your benefit.
- Borrowers can even look into switching from an ARM to a fixed-rate loan to lower their monthly payments. After the introductory period of an ARM, your interest rate may have risen drastically. With a fixed-rate loan, you'll always know what you owe month-to-month, giving you more peace of mind.
- Some homeowners who find themselves in need of cash at short notice, choose to borrow cash against their home equity with a Cash-Out Refinance. Despite the additional, long term cost of a Cash-Out Refinance, it is a good opportunity for homeowners who need instant funds for renovations, bills, or emergencies, without having to sell their home.
FHA Loan Articles
April 3, 2021Borrowers can choose to refinance for several reasons, but it comes down to prioritizing different benefits. One homeowner may want the lowest possible monthly payment, while another might want the shortest possible term for their loan.
March 15, 2021A key step in the mortgage process is the home appraisal. In the case of home purchase or refinance, this is a task that is almost always required by the lender, and it is important that potential homebuyers understand what, how, and why of a home appraisal.
March 6, 2021When buying a home, you have a list of things you need to do. Get pre-approved, arrange for a home inspection, and a few other tasks. One important thing on that list is shopping for homeowner’s insurance.
February 26, 2021Many Americans go with FHA loans because there are a number of mortgage programs that can fit different needs. These programs include FHA Fixed Rate Loans, FHA Adjustable Rate Mortgages, FHA One-Time Close Loans, FHA Condo Loans, and several others.
February 6, 2021As an existing homeowner, you may want to take advantage of falling interest rates by refinancing your current mortgage. For many homeowners, the thought of going through the refinancing process can be tiresome. But an FHA Streamline Refinance could help you avoid the extra work.
January 30, 2021As your closing day gets closer and closer, you might start to feel a little nervous. Do you have everything you need? Will something delay the closing? These worries are natural, but the more prepared you are, the less overwhelming it will all seem.
