Do you have some good equity you’ve built in a federal loan program? Maybe you’re looking for a way to use this equity to help you in other avenues of your life but you have no clue where to start. Sometimes, all you need to do is take that first step in transferring to a federal loan from a conventional loan situation. At any rate, here are some steps to take advantage of FHA refinance options.
Find Out How to Apply for Federal Loans (FHA Loans)
If you are just deciding on a federal loan program, it’s a simple process that requires a few things. Keep in mind that you should have a solid record on deck to make the application process go at a quicker rate. Here are some things you need to help your loan go through quicker: list all of the addresses you’ve previous lived in the past two years, your employer’s name and addresses for the past two years, and your monthly gross salary. You should also have W-2 records on hand as well as submitted taxes for the past two years. Make light of any changes in employment or living situations so the lender knows your stability. It’s the small stuff you leave out that could hinder the speed of the process.
How to Qualify for Federal Streamline Refinancing
If you decide on FHA refinancing options like streamline, here are some things you need to help make this process go by smoother. You need a perfect 3 month payment history. Refinancing is risky for both you and your federal lender, so you want to limit this as much as possible. Having 90 days of on time payments show a sense of trust and responsibility. Always make sure your mortgage is current and not going delinquent. Even though one missed payment is allowed in the last 12 months of paying your mortgage, always try to keep your record clean as a sign of good faith. Also, you want to have 6 months of payments in the 210 day wait for refinancing. As a result of refinancing in this method, you cannot use cash from your equity. You can use it to lower your payments, and you don’t need to acquire an appraisal.
How to Qualify for Federal Cash Out Refinancing
Credit is very important regarding a cash out. You must have a solid credit report with no blemishes. If you do have any errors, it’s highly recommended to call your credit bureau to straighten things out because this will severely limit your FHA refinance options. To qualify for this refinance choice, you need a credit score of 580 and an equity of at least 3.5%. If you cannot get a credit score of 580, you need at least 10% in your home. Otherwise, you are susceptible to major fees to pay this refinance. Your lender takes on quite a bit of risk because you have more freedom to do different things with your equity such as cash out from extra equity. You can use it to finance a second property, pay off auto loans, pay for school, or use it to finance a vacation. Lenders also want to make sure you do a property appraisal to determine market value as well as if your home meets safety/health requirements. Your property has to be liveable by the federal administration’s standards. If you need repairs, find out who knows how to do them in a way that meets protocol. It may very well raise the value of the property.
Why Should You Talk to Lenders Regarding Your FHA Refinance Options?
More perspectives serve better than one. Also, you have to take into account rates and fees that affect you between a 15-30 year basis. Some lenders have leniency regarding their fees such as titles, origination, and appraisals. See how this plays into your own financial situation. It also helps to calculate these on your own so you can better negotiate a ball park figure. If one way doesn’t seem right, you always have other options on hand. Choose carefully, but don’t wait too long especially in a fluctuating market.
Always be cautious when deciding FHA refinance options. Take a good look at your credit, income, and equity to come up with the best possible idea for financing your home. Learn how way of refinancing can affect your home and livelihood. Talk to credible lenders to find out realistic choices so you won’t go deep into debt after an extended period of time.