Articles Tagged With: FHA Refinance

What happens to my FHA loan in a natural disaster?

June 11, 2015

FHA Refinance Loan Facts

Are you thinking about refinancing a home loan? There are some facts about FHA refinancing loans you should know before you start shopping around for a lender. And that’s an activity more than one borrower doesn’t think about when first considering a refinance. Did you know you don’t have to stay with your original financial institution in order to refinance a mortgage? That’s our first tip about home loan refinancing: Shop Around For A Lender Your current lender may or may not offer you the most competitive refinance loan interest rates and/or terms. Do you know what other rates are offered elsewhere? You do not have to use the original lender to refinance a home loan with an FHA mortgage. You will need to find a participating FHA lender, but | more...

June 9, 2015

Why Refinance Your Home Loan?

By Joe Wallace

There are lots of articles and blog posts about refinancing your home loan, but many of these are technical; few of them discuss the reasons it might be a good move to consider applying for an FHA refinance loan. Consider an article written last year by a staff member at Marketwatch.com titled, “Half Of Americans Cant Afford Their House”, which discusses a serious issue among some home owners. According to the article approximately 15 percent of home owners in the United States were said to be in housing markets where the monthly mortgage loan payment ate up more than 30 percent of monthly income. 30 percent is, the article states, the maximum for rent or mortgage loan payments in terms of affordability. Exceeding that 30 percent is not recommended. Home | more...

May 21, 2015

FHA Refinance Loans, Appraisals, and Refunds

By Joe Wallace

A reader asks, “I closed a cash out refinance in December 2014. The term was a fifteen year at 4.75%. I received a flyer from my lender in February that offered a 3.25% rate. I decided to inquire about a thirty year term as circumstances had changed significantly after the first of the year with my wifes job. The lender sent me a GFE and we locked in the rate. After a short while I was told I had to pay for another appraisal and basically resubmit all of the paperwork that I had previously sent to the lender. As of three months later I still have no refinance and am out of pocket over $500.” “Is this legal to open two FHA cases within two months and why was | more...

May 12, 2015

FHA Cash Out Refinancing Loans For Paid-Off Mortgages: A Reader Question

By Joe Wallace

A reader asks, “I have a house paid for and I am looking for a F H A loan for $10 thousand or $15 thousand . According to bankers because I have not bought anything in the past 10 years I have no credit. is it possible to get a loan somewhere?” FHA loan rules printed in HUD 4155.1 Chapter 3 Section B states that it is possible for an FHA cash out refinance loan on a home that has been paid in full. Specifically, the Chapter says: “Cash out refinance transactions are only permitted on owner-occupied principal residences. Properties owned free and clear may be refinanced as cash out transactions”. However, FHA loan standards aren’t the only ones at work in cases like these–the lender’s standards also apply. If | more...

April 13, 2015

FHA Streamline Refinance Loan Applications: A Reader Question

By Joe Wallace

A reader asked us a question recently about applying for a refinance loan. “Do I mark “YES” on “Credit qualifying Streamline”?” The term, “credit qualifying streamline” refers in this case to an FHA streamline refinance loan that requires a credit check. HUD 4155.1 states the following about credit qualifying: “The purpose of the mortgage credit analysis is to determine − a borrower’s credit performance − a borrower’s capacity to repay the mortgage, and − whether or not the borrower has sufficient funds to close, and – limit collection actions or foreclosure. ” Furthermore, as part of this process, HUD 4155.1 states: “The lender must • verify the borrower’s identity, and • ask sufficient questions of the borrower to get a complete picture of the − borrower’s financial position − source | more...

April 9, 2015

FHA Cash-Out Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “Our home is in trust, and my mother-in-law has signed a quit claim deed. My husband was in a hit and run motorcycle accident 3 years ago this coming June. Due to his inability to work for 4 months we struggled with payments and our credit is horrible. We would like to get a loan on our house so we can pay off a home equity loan, and multiple collections.” “Our home is valued at approx. $250,000, and we would like to get a loan for half of that so we can get out of debt and make some improvements to our home. My husband has credit scores of Experian 558, Equifax 517, and Transunion 491. Is it possible to find an FHA lender that would be | more...

March 31, 2015

FHA Short Refinance Program: A Reader Question

By Joe Wallace

A reader asks, “Will the FHA Short Refinace Program give the lowest interest rate? Secondly, will there be a refinance charge? Does this work with Fannie Mae?” This reader question refers to the FHA Short Refinance Loan Program which was extended last year to 2016 and is intended for borrowers who find theselves “upside down” or “underwater” on their home loans. According to an FHA fact sheet published at FHA.gov: “FHA’s Refinance of Borrowers in Negative Equity Positions (“Short Refinance”) is available to help people who owe more on their mortgage than their home is worth because their local markets have seen large declines in home values. The temporary enhancements to the existing refinance program apply to loan applications with FHA case numbers issued on or after September 7, 2010 | more...

March 18, 2015

FHA Refinance Loans With An Appraisal: Some Basics

By Joe Wallace

If you have never applied for an FHA appraisal-required refinance loan before, you probably have plenty of questions about program basics. How long can the new loan be? Can I re-use a previous appraisal? What is the maximum loan amount? The answers to these questions can be found in HUD 4155.1 Chapter Three Section A, which informs us that the longest loan term for any refinance with an appraisal is 30 years. Chapter Three also adds: “The maximum term of a streamline refinance without an appraisal is limited to the lesser of • the remaining term of the existing mortgage, plus 12 years, or • 30 years.” The appraisal question is also answered here, with FHA loan rules stating that FHA appraisals (for existing properties) are good for six months, | more...

February 4, 2015

FHA Loan Reader Questions: Help With an Existing FHA Mortgage

By Joe Wallace

We get many questions about FHA home loans. Some of them come in the form of detailed queries about specifics of a certain FHA loan program, others come as more general questions about the nature or scope of FHA home loans. Here’s one of the more generalized questions that came in recently. A reader asks: “What about help with a current FHA loan? Remodification?” It’s not clear what the reader is getting at with this question, but assuming the reader wants assistance with an existing FHA loan in order to get into a lower monthly payment, the good news is that there is definitely assistance available in the form of FHA Streamline Refinancing. FHA Streamline refinance loans are for borrowers with existing FHA mortgages who want a lower interest rate, | more...

December 11, 2014

FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I had moved out of my home while renovations were done to my property prior to getting an FHA re-fi I had an FHA appraisal done immediately after the repairs were completed.”” “However now the lenders says that because the property was vacant when the appraisal was done it appears that no one lives there and therefore they are not allowed to do a re-fi for this property and to compound the problem I have been told that every lender subsequent to this lender will say the same thing. Is this true?” It’s impossible to speak for all lenders–policies may vary from one financial institution to another. However, one thing to keep in mind is that FHA appraisals do have an expiration date and once that expiration | more...