If you currently have a home, there are options homeowners can consider regarding refinancing their home. All refinances aren’t the same, and different options offer different advantages.
An FHA refinance refers to refinancing a mortgage using a loan insured by the Federal Housing Administration (FHA). The FHA is a government agency that provides mortgage insurance to lenders, allowing them to offer more favorable terms to borrowers, especially those who may not qualify for conventional loans due to lower credit scores or smaller down payments.
There are several types of FHA refinance options:
- FHA Streamline Refinance: This type of refinance is designed for borrowers who already have an FHA loan and want to refinance into a new FHA loan with potentially better terms. The streamline refinance process is simplified, often requiring less documentation and paperwork. It’s primarily used to lower the interest rate and reduce monthly payments.
- FHA Cash-Out Refinance: With this option, borrowers can refinance their existing FHA loan and take out additional funds in excess of the remaining mortgage balance. The extra funds can be used for various purposes, such as home improvements, debt consolidation, or other financial needs.
- FHA Rate-and-Term Refinance: This refinance option allows borrowers to change the terms of their existing FHA loan without taking out additional funds. Borrowers might choose this option to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, change the loan term, or reduce the interest rate.
Do you currently own a home and interested in a refinance? Connect with you today to discuss your refinancing options!