While homeowners typically equate the FHA loan program with low-down payment mortgages, FHA refinances are have a ton of benefit.
In addition to easy-to-source rate-and-term and streamline refinances that replace an existing FHA mortgage with a better one, the FHA even offers cash-out refinance loans.
A cash-out FHA loan refinance allows the borrower to take out up to 85 percent of the value of his or her property. In today’s market, the ability to pull out 85 percent of a home’s equity is attractive, but not as generous as a 96.5 percent FHA purchase mortgage.
Nevertheless, while the homeowner doesn’t get the high leverage of a regular FHA mortgage, he still gets many of its other benefits.
FHA Refinance Requirements
FHA cash-out refinances don’t impose limitations on how borrowers use the cash they take out. In addition, they also don’t require the applicant to have stellar credit.What they don’t need is an existing FHA mortgage — FHA cash-out loans are available even when a borrower is coming from a conventional mortgage.
To learn more contact your Maine FHA Mortgage Consultant Today!
Interest rates fluctuate frequently, often depending on the news. If you are considering refinancing your home, your loan officer may suggest locking in the interest rate on your loan.
There are some valid reasons why this is a good idea including:
Saving Money For The Long-term
Over the life of a loan, an increase of as little as one-quarter of a percent can cost thousands of extra dollars. Spending a small amount of money now to lock in a rate can save money over the life of the loan.
Your loan officer will explain the difference in rate increases initially, over a year and over the life of the loan.
You May Not Qualify At Higher Rates
Whether you are considering refinancing your property or you are buying a new home, you may discover your rate just qualified for your loan to meet the required debt-to-income ratios. An interest rate increase may mean you will not qualify for the loan.
Closing Times May Impact Their Decision
If a loan is scheduled to close within 30 days, it may be a good idea to consider locking in the interest rate your loan officer is offering. The lock will help protect against potential increases in rates during that period of time. This will help you plan your final closing costs and ensure your monthly payments will not be higher that estimated.
Don’t Forget: Upcoming News Impacting Rates
There are often issues that will have a serious impact on interest rates. For example, the current Quantitative Easing program by the Fed is keeping rates low. Should the Fed reveal they intend to modify or taper their program; chances are fairly good that rates will take a slight hike.
Loan officers can help you unwind the news and make sure your refinance is not negatively impacted by interest rate increases.
Not every refinance customer will want or need to lock in their interest rates. However, once a loan has been approved, you should consider talking with your loan officer about the potential of locking in. A quick phone call could save you thousands of dollars over the life of your loan.