When you own a home, you are in a privileged position that only a small percentage of people on the planet enjoy. Home ownership provides a lot of things, including a place for your stuff, physical security, protection from the elements, and an investment vehicle for yourself and your family.
It may have been a few years or more since you signed the papers for your existing mortgage. Given that some time has passed since then, you are undoubtedly in a different situation than you were then. Your credit score may have changed, your job situation may be different, and interest rates may be at different levels than they were at that time.
In fact, it may be the case that refinancing your mortgage is an advisable move at this time. While the decision to refinance depends upon a number of factors that you should consider, mortgage refinancing can often be advisable when:
a. you want to cash out some of the equity in your home
b. you notice that interest rates are lower than when you took out your existing mortgage
c. you want a new loan with shorter repayment terms (say, 10 years instead of 30 years) in order to have the loan cost less in the long run
What Is A Federal Refinancing Loan?
If you are considering refinancing, you may have heard of federal home loans. This is another name for FHA loans. FHA stands for the Federal Housing Administration. It has been in existence since 1934 and was established to help stabilize the housing industry, improve housing standards and conditions, and to provide an adequate home financing system.
In 1965, the FHA became a part of the Department of Housing and Urban Development. Together, the two organizations have insured over 34 million home mortgages.
When To Consider FHA Refinancing?
There are various situations in which you might want to consider an FHA refinance loan, such as:
a. You face foreclosure on your home.
b. You have an adjustable rate mortgage (ARM) whose variable rate has made your monthly payments too hard to make.
c. You have average or below average income for where you live.
d. Your mortgage payments make up more than 31 of your income.
e. You live in the home you would like to refinance.
Federal Refinancing For Home Loan 3 Tips
If you are considering refinancing your home loan, here are 3 tips that can help you get the best interest rates:
1. Research your credit score: As with any other type of loan, your credit score does affect your ability to refinance you home. It is a good idea, therefore, to know your credit score before applying for an FHA loan. Note: do not worry if you have a few glitches on your score due to hard times: the FHA approved lenders look at your overall credit history, not just your score or recent activity.
2. Make a list of multiple FHA Lenders: Can t tell if a particular lender is an FHA approved lender? Don t worry: just visit their website and look for FHA approved, or contact them to ask them if they are an approved lender.
3. Apply to multiple lenders: Once you are ready to apply, research and make a list of multiple FHA approved lenders. Remember, each lender will likely offer you a loan at a different interest rate. So, it is very important that you apply to at least 3 5 lenders before making your choice to go with a particular lender. More choices is always best.
When considering refinancing your home, federally backed FHA loans can be a smart way to go. Follow these 3 tips to help you get the best possible interest rate on your new loan.
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