There are many different things that have been attacking the economy and the housing market. The down turn has made it hard for anyone that has a mortgage to make the payments and we are seeing a lot of foreclosed homes. Refinancing is a good way to try and keep you home and possibly see your payments drop. Refinancing FHA loans has been a necessity as well and, as with any decision, can have a positive effect on a home owner’s payments and credit score.
Many different people have purchased a home with an FHA loan. They have become more popular because it has become harder to get a conventional loan or a low down payment insured conventional loan. This is because people’s credit scores have lowered due to the economy. There are a few basics that everyone should know about when it comes to FHA
FHA loans are not loans through the government. This is a misconception that most people know about. They are loans secured against the default by the FHA. They have no income limits when it comes to buying a home which is a positive for those that don’t have a lot of money to use as a down payment. They work with everyone so that people are able to get into a house of their own and help to stabilize the economy and housing market.
Refinancing FHA loans has never been easier. FHA wants home owners to be able to stay in their homes so they work with the homeowner and whatever circumstances they have, to be able to keep their home in their hands. There are a couple of requirements to be able to refinance. One of them is that the loan must be current and not delinquent in any way. Another is that it has to be FHA insured.
Finding a way for people to keep their homes is something that is important to everyone. To try and stabilize the housing market, FHA is working with first time home buyers to try and get them into homes with as much ease as possible. If a family does need to refinance, FHA will do what it can to help you keep your home.
If you are one of the many people that finds it necessary or just want lower monthly home payments then now is the time to join everyone else refinancing FHA loans.
By: Al Hardy
Posts Tagged ‘Mortgage’
Home Equity Loans vs. Refinance Loans
January 30th, 2010
To many people, there seems to be very little difference between a home equity loan and a refinance loan. However, there are some differences. You will find that a home equity loan, whether it looks like a more traditional loan or a line of credit, offers a little more flexibility. However, the refinance loan usually offers a lower interest rate. Both types of loans, however, have interest that is tax deductible. Make sure you understand the features of both before making a decision between home equity loans vs. refinance loans.
Home Equity Loans
Included in home equity loans are home equity lines of credit. You can decide how much of your equity you want to use as collateral for the loan. Equity is how much you “own” of your home. It is the difference between how much you have left to pay on your home loan and how much your home is worth on the current market. You can borrow part of your equity, or you can borrow all of it. Additionally, you can choose how you want to receive the money: as a lump sum or as a line of credit. This can allow you some flexibility. If you choose the line of credit, you don’t have to borrow up to the limit, but more is available if you need it.
Refinance Loans
While some of the accumulated equity in your home is used in a refinance loan, the loan is really meant to establish new terms for your loan. The entire mortgage is redone, and some of the accumulated equity you have can be added in for a “cash out,” where you take cash and your home is refinanced for an amount that is higher over all. You have no decision as to how to take your loan. It is lump sum. It is applied to “pay off” your “old” mortgage, and the remainder, the “cash out” portion, is given to you. Usually, it is possible to spread the terms out over a longer period of time than a home equity loan, and you usually end up with a lower interest rate.
Home Equity Loans vs. Refinance Loans: Which is Best For You?
You have to decide which would work best for you. If your purpose is to mainly to fix an interest rate or change the loan term to something longer or shorter, and maybe get a little extra cash to pay some bills or take a vacation, the home refinance loan may work best for you. However, if you are looking for flexibility, and you are not sure exactly how much you need, a home equity loan, in the form of a line of credit, might be your best option. Do your research, though, and shop around for a loan that suits your specific needs.
By: L. Sampson