May 13, 2022
There are many reasons to consider refinancing a home loan with an FHA mortgage. Some aren’t as attractive in times when interest rates are moving higher, and others may require a refinance no matter what the rates are doing.
Recovering from financial or natural disasters can bring a homeowner back to the lender to discuss options for saving a home through refinancing as one possible option.
In the spring of 2022 when inflation and other issues contributed to rising interest rates, cash-out refinancing may not be on the table in the minds of those worried about a continued rise in rates.
But some homeowners affected by the pandemic who are struggling to make their mortgage payments or struggling to keep up due to the long-term financial effects of COVID-19 on many communities might not have a choice but to consider refinancing to avoid FHA loan default and foreclosure.
Saving your home through a refinance may cost more in 2022, but the alternatives are worse. And conditions in America that can affect your decision to refinance aren’t limited to just what COVID-19 is doing.
Climate change and an increasing number of natural disasters across the nation have forced some homeowners to consider FHA 203(k) Rehabilitation Refinance Loans and other measures to repair houses damaged by floods, mudslides, hurricanes, wildfires, tropical storms, and other natural disasters.
In most of these cases, borrowers trying to physically or financially save their homes have FHA refinance loan options to choose from. Those who need to refinance to avoid foreclosure have the most options available to them when they act quickly.
Your ability to refinance the loan instead of needing a loan modification or loan forgiveness depends on working out details with the loan servicer before you get too far behind on your mortgage payments.
Your ability to apply for an FHA 203(k) Rehabilitation Refinance is not affected by a time limit, but if you need the other FHA Rehab loan, the FHA 203(h) Rehabilitation Loan is designed specifically for disaster victims. But you will need to act without delay as it is not offered indefinitely.
The 203(h) loan (which can be used in conjunction with an FHA 203(k) Rehab loan) is only available to you to apply for a year after the disaster strikes. FHA 203(h) loans are only for those in federally-declared disaster areas. Talk to a participating FHA lender about these options should you need them.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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