| Are you ready to refinance? An FHA loan refinance | | | | lender, give some serious thought to how much you |
| may be just the ticket. | | | | can afford in a home loan. |
| If you are a homeowner, you have already | | | | 4. Shop for an FHA approved lender. |
| experienced applying for a mortgage. According to | | | | Contact several lenders. Prepare a cheat sheet telling |
| FHA, refinancing with this insured mortgage is the | | | | why you are in the market for a refinance and that |
| same as applying for any other home loan but in | | | | you are considering FHA home loans. Not all lenders |
| addition qualifying standards are easier and protections | | | | are approved by the Federal Housing Administration |
| better. | | | | so ask upfront if they have approval. |
| The following six pointers from the Federal Housing | | | | Compare mortgage closing costs and interest rates |
| Administration will help you decide whether an FHA | | | | between lenders. Ask for a preliminary Good Faith |
| loan refinance is worth pursuing. | | | | Estimate detailing fees, loan amounts, interest rate, loan |
| 1. Do you currently finance with an FHA home loan? | | | | program and monthly payments. Then simply compare |
| If you do, there are a few more options available to | | | | the information. |
| you such as an FHA streamline refinance. Call the toll | | | | Also ask when you can lock in your interest rate, for |
| free number of your lender to ask what type of | | | | how long, and if there are charges for locking, upfront |
| program finances your home if you aren't sure. Either | | | | or included in the loan. Find out the policy if interest |
| way you can still take advantage of an FHA loan | | | | rates were to drop during the FHA loan refinance |
| refinance. | | | | process. Request and review a written rate lock |
| 2. Why are you refinancing? | | | | agreement before making application. |
| Perhaps you intend to take advantage of the current | | | | 5. Ask to be prequalified upfront. |
| interest rate environment. Consider combining high | | | | Prequalification works well for refinancing because it is |
| interest debt into your mortgage. If you intend to make | | | | not as in depth as mortgage preapproval. Because |
| some home improvements, you may be contemplating | | | | prequalification is informal, you don't need to provide |
| the option of taking out cash from a portion of your | | | | social security numbers. This eliminates multiple credit |
| equity. | | | | inquiries. |
| Whatever your home loan refinance goals are, | | | | Getting prequalified by a lender helps to estimate the |
| knowing your primary purpose to refinance will help | | | | amount you will be qualified to borrow. The amount will |
| determine if there is an applicable FHA refinance | | | | be based on simple criteria, for example salary, debt |
| mortgage for you. | | | | ratios, and whether you've had a foreclosure or |
| 3. How much can you afford? | | | | bankruptcy in the past. |
| Most people let their lender tell them what they can | | | | Most mortgage brokers will do this over the phone or |
| afford but there is a fundamental difference between | | | | in person if you prefer. |
| affordability and qualification. | | | | 6. Now it is time to apply for the FHA refinance |
| I looked up afford in Merriam-Webster's Online | | | | mortgage. |
| Dictionary. Afford means manage or bear without | | | | Your lender will order your credit report and give you a |
| serious detriment. | | | | checklist of documentation they require to process |
| But no lender can tell you what you can manage | | | | your FHA loan refinance. |
| without detriment to your financial affairs. Only you can | | | | No need to put off refinancing when FHA could be |
| decide that. So before you contact an approved FHA | | | | your open door. |