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What about a FHA Mortgage Refinance?
Each year HUD makes changes to improve the FHA mortgage refinance loan program. Refinance Rate Quotes offers qualified homeowners FHA mortgage refinancing for rate and term or cash out refinancing. Borrowers who already have a FHA mortgage may even qualify for the FHA Streamline. FHA refinance loans ensure Americans will have a low fixed rate for thirty years. FHA guidelines changed in 2010, so make sure that you discuss your qualifications with an experienced FHA loan professional.
The Federal Housing Administration (FHA) now has new programs under which a troubled holder of a subprime adjustable rate mortgage (ARM) can refinance into a lower interest fixed rate loan. FHA Secure is part of the Economic Stimulus Act of 2008. Under this program, only those holding the high-risk subprime ARMs with recently reset interest rates are allowed to refinance. But, FHASecure expires on December 31, 2008, so you need to act quickly in order to take advantage of the program.
There is another FHA mortgage refinance program that is part of the recently passed Housing and Economic Recovery Act of 2008 called the HOPE for Homeowners Act. Under this Act, borrowers facing foreclosure can refinance into a lower interest fixed-rate loan. But, they also have to agree to share at least 50% of any equity they build in their homes with the FHA for as long as they own the home. This is fine for someone looking to stay in their home for the rest of their lives. But, for someone who plans to either refinance when their finances and credit scores improve or someone who's planning to sell their property, refinancing under the new HOPE for Homeowners Act probably isn't advantageous.
Our FHA Refinancing Advice
If you're currently facing foreclosure, we suggest that you act quickly and look into refinancing under FHASecure. If you miss the deadline for FHASecure, the HOPE for Homeowners Act is a good option even though you'll have to share your home equity with the FHA. It's better than losing your home to foreclosure and having to deal with the credit repercussions associated with it. If you're not yet late on your loan, and you have good credit and good equity in your home, a conventional refinance may work out well, especially if you plan on staying in your home for at least 5 years. Interest rates are lower now than they have been for quite some time. A home refinance could make a huge difference in what you're paying on your mortgage.
If you are a current FHA customer, try to get a FHA Streamline refinance loan for better rates and terms. There are no cash out options under the FHA Streamline loan, but you could save money due to lower interest rates, and the fees are generally pretty low since there's typically no appraisal or credit check involved. The Veterans Administration (VA) has a similar option for its VA loans-the VA Streamline refinance.
If you want to keep your home, but don't have enough equity to do a convention refinance or get into a foreclosure bailout loan, a short refinance may work out for you. A short refinance, also known as a short-refi or a short payoff, involves the existing lender accepting a payout of less than what is owed on the property. Then, the new loan is refinanced by a different lender. It allows you to keep the home and avoid foreclosure but is not as widely accepted as a loan modification, which is yet another option for you. Fill out the free loan quote on this page or call us to find out what your options may be.