Los Angeles, CA (PRWEB) January 27, 2013
Refinancing an FHA loan is a good way for homeowners to save money. Red Blue Realty offers information about this refinancing process. Homeowners interested in refinance can usually lower their monthly payments because of lowered interest rates, or they can convert from a 30-year fixed loan to a fixed rate 15-year loan, which will allow the faster building of home equity in a property. Refinance options also strongly benefit homeowners who would prefer a conventional fixed rate loan to an adjustable mortgage rate. And, many homeowners find that refinancing is a convenient way to make use of their home equity as well. One note: refinancing an FHA loan is a process available for homeowners who use their property as a primary residence only.
Refinancing is an excellent option however for homeowners whose property has increased in value since their property was purchased. These homeowners may be seeking a cash-out option. This option would allow them to take out a mortgage for a larger amount than the amount they currently owe. They can then receive the balance of that loan as cash. This is a type of loan that can be valuable for homeowners later in life in regard to handling new vehicle purchases, college education funding, or medical expenses.
Some options for homeowners who choose refinancing an FHA loan will allow the homeowner to refinance using the FHA’s streamlined refinancing program. This program gives home owners the ability to proceed with reducing their home mortgage interest rate rapidly, often without an appraisal. The FHA Streamline Refinance may also reduce much of the paperwork necessary for lenders and borrowers, which saves time and money for both the borrower and the lender.
The FHA began this sort of refinancing in the 1980's. While the streamline process cannot completely eliminate fees, it does substantially reduce the documentation necessary and the underwriting necessary to complete the loan process.
Red Blue Realty notes that to take advantage of the streamline refinancing process, there are some basic requirements to be met:
- first, the mortgage must be insured by the FHA
- second, the mortgage must have no delinquent payments
- third, the refinance must lower a borrower’s principal and interest payments
- fourth, the refinance converts an adjustable rate mortgage (ARM) to a fixed-rate
-fifth, with streamlining, there is no cash-out option available to the borrower
Streamlining an FHA loan may take several different paths. Some mortgage lenders provide refinances that eliminate out of pocket expenses for the borrower. And note that while in many cases an appraisal can be eliminated, any properties involving a rental unit do require an appraisal.
As with any mortgage financing process, when refinancing an FHA loan a borrower will need to gather and present certain documents for the lender. These documents often include bank statements, pay stubs or W-2's; and tax returns for self-employed applicants. A credit report will also be required. The borrower should be prepared to discuss any credit blemishes on the provided credit report, such as late pays. In addition, bank statements must be verified. The borrower can make refinancing progress more quickly by providing bank statements for the preceding three month period to the lender.
No matter what refinancing option a borrower may choose to take advantage of, the benefits of refinancing an FHA loan can be substantial. To start the process, contact FHA approved lenders.
Email: Contact (at) redbluerealty (dot) com
Phone Number: 1-(855) 66-RBREALTY or 1-(855) 667-2732