Refinance Loan: Refinance Loan Programs
There are many reasons why you should go through a refinance loan but the bottom line is to save money. Depending on the refinance loan borrower, a refinance mortgage serves two purposes: To save money on their mortgage expenses or to lower their monthly payments. We will be discussing why a refinance mortgage loan is beneficial.
Lower Mortgage Payments By Refinance Loan
Current FHA mortgage rates now is at 4.25% for a 30 year fixed rate. If you purchased your home last year after May 2013, mortgage rates sky rocketed. If you are currently paying a mortgage rate of 5.0% or higher, you may consider a refinance mortgage loan where it can save you thousands of dollars over the course of the loan. If you are a FHA insured mortgage holder, you can qualify for a FHA streamline refinance mortgage loan where there is no verification of income required as well as no credit or appraisal required. The only requirement is that you have been current on your FHA insured mortgage loan for the past 6 months and no more than one late payment in the past 12 months. This new FHA streamline refinance mortgage program streamlines the mortgage loan approval process and depending on what your current mortgage rate is, can save you thousands over the course of the loan term.
Refinance Loan From FHA Loan To Conventional Refinance Loan
FHA insured mortgage loans have lifetime mortgage insurance premium requirements and it is 1.35% of the mortgage balance that is charged every year. By refinancing your FHA insured mortgage loan to a conventional loan can either reduce or eliminate your mortgage insurance premium depending on what type of conventional refinance mortgage loan program you choose. There are conventional mortgage loans that have no mortgage insurance requirements and will lend up to 95% loan to value. This conventional mortgage loan program is called Lender Paid Mortgage Insurance conventional mortgage loans. Mortgage rates are slightly higher since no private mortgage insurance is required.
Cash-Out Refinance Loan
If you have equity in your home and need extra cash to either consolidate your bills or for other reasons, you can do a cashout refinance mortgage. Cash-Out refinance mortgage loans are tax free where you do not have to pay taxes on the money you take out of the equity in your home.
By Gustan Cho