REFINANCING
FHA mortgage refinancing has many features that conventional loans don't have
Effective refinancing typically means lowering your current mortgage loan rate by at least 1/2 TO 1 percent. You might also want to consider changing the length of your loan or receiving cash from the equity in your house.
Government-Insured loans If you meet the qualifications, consider the mortgages offered by the Federal Housing Administration (FHA) or the Department of Veteran’s Affairs (VA). Consider the Farmers Home Administration (FmHA) for homes in rural areas. Properties refinanced under these programs must meet certain minimum standards, loan limits, and income limits.
FHA STREAMLINE REFINANCE
Millions of Americans refinance their mortgage loans every year. Like them, you want to fully understand the process and costs involved.
For many homeowners, the monthly mortgage payment is the largest expense in the monthly budget. That’s why refinancing to take advantage of lower interest rates is the first option many homeowners take to cut costs..
Homeowners refinance their mortgage loans for many reasons, including to lower their interest rate and monthly payment, to build equity in their home faster by shortening their loan term, or to draw on the equity already built in their home through a “cash-out” refinance.
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FIXED RATE MORTGAGES
- When interest rates decline, some homeowners choose to refinance an adjustable-rate mortgage (ARM) to a fixed-rate mortgage or to convert a longer term, fixed-rate loan to one with a shorter term.
- If you expect to remain in your home for several years, you may want a fixed-rate mortgage that will ensure that your interest rate will remain the same for as long as you have your loan.
- If you want the stable, predictable payments of a fixed-rate loan, then you must choose from a variety of payment terms—15 and 30 years are the most common. Some people who currently have a 30-year fixed-rate mortgage choose to refinance to a 15- or 20-year fixed-rate loan.
- Although the amount of your monthly payment may increase with a shorter term loan, you will reduce the total interest you will pay over the life of your loan, while building up the equity in your home faster.