Requirements For 2015 FHA Refinancing
The FHA refinancing requirements for the current 2015 programs are helping FHA home loan borrowers to take advantage of the ever low mortgage interest rates. Having low interest rates is a great time for taking mortgages, and a refinance process, is just that, taking a new mortgage with better rates and closing off the current mortgage. See this short review on the 2015 FHA refinancing requirements.
What FHA Refinance Programs Are Available
There are several FHA 2011 refinancing programs to pick from. Not all of the refinancing plans are suitable for all the borrowers, it depends if the borrowers are in line with the FHA 2015 refinancing requirements.
The two main programs offered are called:
FHA Cash-Out Refinance and FHA Streamline Refinance.
FHA Cash-Out Refinance 2015 Requirements
Cash out refinancing was a very lucrative offer back at 2009, it was so lucrative that the HUD administration had to tighten the FHA Cash-Out Refinancing requirements for these plans, as people took mortgages they could not handle just to refinance them a month later and cash out due to the declining rates. The current FHA refinancing requirements 2015 for the cash out programs are:
- 85% Value – The FHA insured refinance mortgage offer may not exceed 85% of the appraiser’s estimate of value. This is done so 100% mortgages would not be cashed out easily. This means 15% equity must be built over time.
- One Year Ownership – The FHA refinance will be provided if the property was owned for at least one year before the refinancing request. This too was done to prevent month to month borrowing and refinancing with cash out.
- 1-4 Unit Property – Not any property could be refinanced with the cash out option. This was meant to help people, so the requirements for 2015 FHA refinancing are specific for domestic 1-4 unit home property.
- Owner-occupied – This requirement is meant that only people who use the property for personal use will enjoy the cash out. Other real estate investment intentions and rented property can not get FHA cash out refinancing.
FHA Streamline Refinance 2015 Requirements
The HUD streamline FHA refinancing requirements are simple to follow:
- FHA Mortgage – The HUD (Housing and Urban Development) requires that the streamline refinance will be issued only to people who took the FHA insured home loans. This is meant to help those who needed the FHA and borrowed their mortgage with the FHA loan requirements.
- First FHA Mortgage Only – The streamline refinancing is permitted only to those paying current mortgage.
- Lowering Payments – The streamline refinancing will be proceeded only if the monthly refinancing payments is lower than the current mortgage payments. This is done because there are plenty of reasons to refinance and the HUD wants to make sure – the monthly payments are reduced to allow more borrowers more financial possibilities when times are tough.
- No Cash Out – One other requirement for the FHA streamline refinancing is that no cash will be taken out during the refinancing process. For this option there is the Cash Out Refinancing program, mentioned above.
- Minimum 6 Payments – There need to be at least 6 monthly payments on a FHA loan before the FHA streamline refinancing can begin to take effect.
FHA Refi Plans Conclusion
For those who have took a FHA home mortgage, and have been building some equity over time, these two refinance programs are a lifesavers, allowing the homeowners to lower their monthly payments and get some relief from the high mortgage payments.
The FHA refinance requirements for 2015 are fair and thoughtful to prevent those who want to take financial advantage of the government backed home loans.
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