| Are you currently considering refinancing your home? | | | | refinance loan. |
| Maybe you have heard how interest rates are a 5 | | | | If you have had a previous bankruptcy, it may still be |
| year lows or that FHA refinance loans and their | | | | possible to get an FHA Refinance. If you have been |
| updated programs have become wildly popular. Lucky | | | | discharged from a Chapter 7 bankruptcy for two |
| for you, both of those things are true making for an | | | | years or more, you are eligible to apply for an FHA |
| excellent refinance opportunity. And it is no more | | | | refinance loan. If you are in a Chapter 13 bankruptcy |
| difficult to apply for an FHA Loan than it is for a | | | | and have made all court approved payments on time |
| Conventional Mortgage. | | | | and as agreed for at least one year, you are also |
| Before you decide to refinance, you should know the | | | | eligible to make an FHA loan application. |
| basic requirements for FHA Mortgages. To be eligible | | | | FHA Loan Refinance Requirements provide multiple |
| for FHA Refinance Loans, your monthly housing costs | | | | options to meet the needs of your current home |
| (mortgage principal and interest, property taxes and | | | | equity scenario. If your home has positive equity, you |
| insurance) must meet a specified percentage of your | | | | may be able to refinance up to 98.75% or 97.75% of |
| gross monthly income. This is called the "Top Ratio" | | | | the appraised value of the home or the amount you |
| and it should be below 31%. You must also have | | | | are refinancing plus closing costs, whichever is lower. If |
| enough income to pay your housing costs plus all | | | | you wish to take cash out of the property, then the |
| additional monthly debt. This is called the "Bottom | | | | maximum financing amount is either 95% or 85% of |
| Ratio" and it needs to be below 43%. These | | | | the current appraised value, depending on the |
| percentages may be exceeded with compensating | | | | borrowers qualifications. If you do not have sufficient |
| factors. | | | | equity in your home to payoff your current mortgage |
| Your credit background will also be fairly considered. | | | | or cover your refinancing closing costs, then you |
| FHA refinance loan requirements are not totally credit | | | | should ask your lender to consider a "Write Down". A |
| score driven, although it is helpful to have at least a | | | | "Write Down" is when your lender writes off the |
| 580 FICO score to obtain a faster approval. FHA | | | | excess balance owed for the purposes of refinancing |
| guidelines are written in a way that provides the | | | | a loan. The Housing Bill that goes into effect on |
| borrower the benefit of the doubt that there had been, | | | | October 1st provide for a Write Down to 90% of the |
| at some point in their past, circumstances beyond their | | | | current appraised value for delinquent mortgage FHA |
| control, and as long as the borrower has recovered | | | | refinances. Offering this option is at the discretion of |
| from those circumstances in a reasonable manner, | | | | the lender. |
| they're generally going to be credit-eligible for an FHA | | | | |