3 Options For Refinancing With FHA Mortgage Refinance!

Do you want to enjoy or need some of the money that you have invested in your home over the years or do you need to reduce your mortgage payment? Refinance loans allows homeowners to get some of the equity out of their homes and also can be used to reduce their mortgage payments. FHA Mortgage Refinance can help you to lower your mortgage payment on your FHA loan and get you a lower interest rate.

To start the refinancing process you will need additional information. You will find below 3 options of FHA home refinancing you should consider.

The FHA Cash Out Refinance Option

This option may be great for you if your home has increased in value since you have purchased the home.

The FHA Cash Out Refinance option will let you refinance your existing mortgage loan by receiving another mortgage loan for more than you currently owe. The old mortgage is paid off and you will receive the difference between the old loan balance and the amount of the new mortgage in cash, thus the name of the option (Cash Out Refinance).

This option allows you to use the built up equity to do whatever you want to do with it.

FHA Streamline Mortgage Refinance

This option is known as a streamlined refinance mortgage because you can reduce the interest rate on your current mortgage loan much faster and easier. Most of time this option does not require an appraisal.

FHA Streamline Mortgage Refinance requires less paperwork for the lender thus reducing the cost and the time required to close. A couple of requirements for this option are the original home mortgage loan must be a FHA home loan and the refinancing has to reduce your monthly interest payments.

Although you will benefit from the FHA Streamline Mortgage Refinance by reducing your monthly payments you can not receive cash back at closing like you can with the FHA Cash Out Refinance Option.

Refinancing A Non-FHA Loan To A FHA Loan Mortgage

If you do not currently have a FHA loan you can refinance it to a FHA Loan Mortgage but you can not use the FHA Streamline Mortgage Refinance option.

If your current mortgage is a conventional mortgage you can refinance it up to 96.5 LTV (Loan to Value). The Loan-to-Value ratio is the amount of the first mortgage expressed in a percentage to the current appraised value of your home.

This could allow for a sizable mortgage loan if you meet all of the requirements.

Using FHA refinancing to refinance your home mortgage loan is usually easier and quicker than using other types of refinancing.

FHA Mortgage Refinance can allow the homeowners use the equity in their home for many things such as help paying for their children college education, or take a dream vacation, or just to pay off higher interest debts. The best place to find more information about FHA Refinance Loans is the Internet. You can find many websites that will help you to decide the best option for you!

Home Mortgage Refinance – The Basics and What You Need to Know

Refinancing a home mortgage simply means that your existing mortgage will be paid off using a new loan (obtained through refinancing), with the chance to obtain a lower interest rate, better terms and conditions, shorter length of the mortgage, switch from a ARP loan into a stable fixed rate loan, or tap into your homes equity and do a cash out refinance.

There are advantages and disadvantages to these refinancing options. Also, refinancing a home mortgage generally costs 4% of the home loans principal, just like when you took out the original mortgage, and also requires an appraisal, title search and application fees, as well as other costs. With this in mind it is very important for a homeowner to consider the costs and determine from there if refinancing their home mortgage will be a true financial benefit.

Obtaining a Lower Interest Rate.

The most common homeowners refinance though is to reduce their interest rate. Typically, a rule of thumb is that refinancing into a loan with a reduced interest rate by 2% or more will be financially beneficial. However today, many mortgage lenders and banks claim that even a savings of 1% can be helpful. By reducing your interest rate, your are not only going to save more money but also build equity in your home at a faster rate with each payment. As an example, say your 30 year fixed rate mortgage has an interest rate of 9% which on a $150,000 is a $1206.93 per month payment. If you can reduce that interest rate to say 4.5%, which is currently available all over the country, that payment would be around $400 per month cheaper for the homeowner every single month.

Shortening the Length of the Loan.

When interest rates drastically fall, as they recently have, homeowners also have a great chance to reduce the length of their home loan by years and still pay around the same amount every month. If you have a $100,000 home, then a refinance from say 9% into a 5.5% loan and cutting the loan into half to 15 years, would only increase the mortgage payment by $14 or so, resulting in huge savings for the homeowner.

Switching from an Adjustable rate mortgage and into a Fixed rate mortgage, or vice versa.

Usually ARM loans start put by offering amazing low interest rates compared to a fixed rate mortgage. However what often happens is that is periodic rate increases that end up higher than the fixed rate you would have been able to acquire. When this happens, switching into a fixed rate mortgage will result in lower mortgage interest rates, and financially stability.

There can also be benefits into refinancing of a fixed rate mortgage and into an ARM. When interest rates are falling, like they have been, an ARM interest rate can will usually go down with the national average rate, which results in lower mortgage payments, which also means their will not be a need to refinance should interest rates keep dropping as your mortgage will automatically adjust. Also, homeowners who do not plan on living in their home for more than a few more years can choose to refinance into an ARM loan and not worry about rates increasing in the future as they will be out of that home by then.

Debt Consolidation and Cash Out Home Mortgage Refinancing

While all of the reasons to refinance previously talked about are all legitimate good reasons to do so, refinancing a mortgage can be a quick way to a deep, seemingly endless, debt. Keep this in mind when considering refinancing your home in order to use the equity or for debt consolidation. A lot of homeowners will use their homes equity to cover large expenses such as a home repair or remodel, or tuition. These homeowners will reason in their minds that remodeling a home adds value to it, or the interest paid on a cash out refinance would still be lower than a typical loan. Other homeowners justify the refinance for cash by saying the new, higher interest rate, is tax deductible. While this may sometimes be true, it is rarely a smart decision to increase the length of your homes mortgage, just like spending $1 extra dollar to save $.29cents in tax savings is not smart.

There are plenty of homeowners who refinance in order to consolidate their debts. From quick glance, replacing high interest debt burdens with a lower interest rate mortgage looks like a great idea. Refinancing a mortgage for cash from the homes equity is not a magic bullet for financial freedom. Typically, people who have gotten themselves into financial trouble will do so again with time. This multiplies the true losses as the costs and fees related to refinancing, losing equity, and more payment years take their toll. This creates a never ending cycle of debts. So refinance with a clear cut financial plan in mind.

Should you even refinance your home loan?

A home mortgage refinance can be a great financial move if used to shorten your loan length, reduce your payments, or build equity faster. It also is a powerful financial option to get up your debts under control. Make sure to carefully evaluate your financial situation prior to refinancing, to know if it is the right choice.

Top 5 Reasons For Mortgage Refinance

Mortgage Refinance Loans – Why get them?

# 1. Bring Down Your Monthly Credit Payment with Mortgage Refinance

If your objective is to stay in your home for a number of years, it probably makes good sense to look at home refinance loans that allow you to pay a point or two to bring down your interest rate and overall mortgage payment. Over a few years, your monthly savings will pay for the cost of the house refinance because of your monthly savings and your lower monthly mortgage payment. However, if your objective is to move in the next few years, you may never recover the cost of refinancing because you will not be in your home long enough. Before you decide to look at home refinance loans, you should calculate the point at which you break even so you can determine if a mortgage refinance makes sense.

# 2. Mortgage Refinance Loans Can Move You From an Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage

For homeowners who are willing to risk upward market fluctuations with home refinance, adjustable rate mortgages (ARM’s) can offer much lower initial monthly payments. In addition, home refinance loans that offer adjustable rate mortgages can also be ideal if you only plan to own your home for a few years because the rate cannot fluctuate very much in that time. But, if you plan to stay in your home a long time, you should consider a mortgage refinance to switch out your adjustable rate mortgage for a fixed rate long term mortgage ( 15, 20, or 30 years). You may have a higher interest rate than with an adjustable rate mortgage, but you will have the peace of mind of knowing that your monthly house payment will not be going up.

# 3. Break Free from Balloon Payment Programs

Home refinance loan programs that have a balloon payment are great when you want lower interest rates and a lower initial monthly payment, just like adjustable rate mortgage refinancing programs. Nevertheless, the whole balance of your mortgage refinance is due to the mortgage company if you still own the property at the end of the balloon payment term (often 5 or 7 years). You can easily change over into an adjustable rate mortgage or a fixed rate mortgage if you are in a balloon program now.

# 4. Get Rid of Private Mortgage Refinance Insurance (PMI)

Low down payment mortgage refinancing loan options allow homeowners access to home refinance loans with less than 20% down. Sadly, these mortgage refinance loans also usually require that you pay for private mortgage insurance, which is designed to safeguard the mortgage company from loan losses. You may be eligible to remove your PMI through mortgage refinance loans because as the value of your home goes up and the balance on your home goes down.

# 5. Tap Your Home’s Equity if You Need Extra Cash

Your house is a great place to look for extra cash when you need it. Like most homeowners, your house has probably gone up in value and that gives you the facility to withdraw some of that money and put it to use as you need to. Pay off tuition, credit cards, make home improvements, buy a new car, or even pay for your daughter’s wedding. With a cash-out mortgage refinance, it’s fast, simple and even tax deductible.