Refinancing a mortgage can provide a you with many benefits, and many are interested in refinancing their traditional mortgage into an FHA mortgage to take advantage of low interest rates. Depending on the specific circumstances, this step may lower your monthly payment, reduce interest charges, adjust the loan term so that it is more beneficial for achieving financial goals and more. Those who are interested in refinancing in an FHA mortgage may consider these steps.
Understand the Rules and Requirements
There are specific rules in place regarding refinancing under the FHA program. For example, the loan amount may be up to 96.5 percent of the value of the home, but you cannot take cash out of the refinance transaction. If cash is taken out, the loan-to-value limit under the FHA program is usually 86 percent of the property value. These limits are in place for loan amounts that are $417,000 and under. Loan amounts that are between $417,000 and $729,750 will fall under a different set of rules. Homeowners should be aware of these rules to ensure that the FHA program is the best fit for their unique goals.
Review Goals and Current Mortgage Details
The next step for you to take is to review your own financial goals and to define your reasons for refinancing. In addition, it is important for you to contact your current mortgage company to learn more about their current interest rate, if there is a prepayment penalty and the current loan balance. Estimating the property value is also important. You may have a reasonable idea about your property value, or you can contact a real estate agent for a valuation. When all of this information is taken into account, you will have a better idea about what to expect from refinancing.
Each homeowner will be in a unique situation regarding current loan details, property value and goals that they want to achieve through refinancing. It can be confusing to decide if refinancing is the right move to make, and it can be even more complicated to determine which loan program is a best-fit for your goals. If you are interested in refinancing from a traditional mortgage into the FHA loan program, contact Nosari Home Mortgage today to determine if it is the best option for you and your family! Call Nosari Home Mortgage today at 870.425.8351.
