When is a good time to refinance an FHA mortgage loan
Many people are wondering if they should try to save money and start the FHA mortgage refinancing process. Then there are the others that are wondering if they can even refinance their FHA mortgage. Either way these are really good questions for anyone that is considering to refinance their FHA mortgage loan.
For homeowners that have not refinanced in a while, there is no doubt that refinancing the loan on an FHA mortgage will save money. Mortgage rates are the lowest that they have ever been. This means for many current homeowners that they are able to cut down their monthly mortgage payments by a lot. In some cases, homeowners were able to cut down their monthly mortgage payments by at least half. The best part about the mortgage rates being so low is that borrowers can lock in a good rate that will save money for years to come and even allow them to put more equity into the house.
The main question for most homeowners is if they are able to refinance their FHA mortgage or not. This question usually stems from the current economic crisis and all of the struggles in the housing market which left a lot of people upside down on their homes. Sadly, homeowners that are upside down on their home are not able to do any type of a mortgage refinance.
For traditional mortgage refinancing, most banks will require that there is at least 20% equity in the home before they consider a refinance. For many homeowners this is hard, but for the ones that have this equity they are able to capitalize on all the benefits that are associated with a mortgage refinance.
For homeowners that are interested in refinancing their mortgage, but do not have a lot of equity in their home, should consult with a mortgage broker in regards an FHA mortgage refinance solution. An FHA mortgage is backed by private lenders but is insured by the federal government. With an FHA refinance homeowners are able to refinance their mortgage even if they have only 3.5% equity in the home. Also to qualify for an FHA mortgage refinance homeowners do not have to meet all of the other requirements that most traditional companies require, like credit, income and assets.
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