Christian FHA Mortgage Refinance
A Christian fha mortgage refinance loan is obtained through lenders who have been especially approved by the Federal Housing Administration to offer mortgages to approved applicants. In 1934, in response to economic conditions arising from the Great Depression, Congress passed the National Housing Act which created the Federal Housing Administration. At that time, many people had lost their homes through foreclosure and the banking system was being restructured. The housing industry was very different than it is today. Home buyers could only borrow up to fifty percent of a property's value which meant they had to have a hefty down payment. The term of the loan, incredibly, would only be for three to five years with a large balloon payment due at the end. No wonder, then, that only four out of ten households owned their own homes.
In 1965, the Federal Housing Administration was placed within the newly-created U.S. Department of Housing and Urban Development, better known as HUD. By providing insurance to lenders that loans would be repaid, the door was opened to families to buy homes with little cash investment. The nation's homeownership rate has improved drastically since 1934. According to government statistics, the homeownership rate was almost 70 percent in 2001. This giant change can be largely attributed to the assistance that the Federal Housing Administration has provided to families who wanted to become homeowners. In today's market, the agency is providing assistance with fha mortgage refinance programs to help families who have been hurt by the rising rates of their adjustable rate mortgages.
The Federal Housing Administration is unique in government in that it operates from self-generated income instead of revenue from taxpayers. The homeowner pays for the mortgage insurance as part of his monthly house payment. Usually, this insurance is paid until the total amount is less than 78% of the value of the property or for five years (whichever factor takes longer to reach). To offer an fha first mortgage or an fha mortgage refinance, a lender has to meet certain criteria set down by the agency. By being an approved lender, the institution has less risk if the property owner defaults on the loan since the agency is providing insurance against any such loss. The underwriting rules for approval are less stringent than those for a conventional loan. Applicants whose credit history or annual income prevents them from being approved by a conventional lender may be able to purchase a home with an fha mortgage.or to obtain an fha mortgage refinance loan.
The housing lending industry looks at two important ratios when determining eligibility for a home loan. The first is the ratio of the monthly PITI to the individual's gross monthly income. The acronym PITI stands for payment, interest, taxes, and insurance. The second ratio is PITI added to other debt obligations compared to the gross monthly income. Generally speaking, the approved lenders for fha mortgages or for fha mortgage refinance loans allow more generous ratios. As a general guideline, the agency wants the first ratio to be within 31% meaning that PITI is 31% or less than the gross monthly income. The agency wants the second ratio, which includes PITI, car loans, student loans, and any other monthly obligations, to be 43% or less of the gross monthly income. In some instances, the ratios may be even more generous. There is also a cap on the amount that can be borrowed. Generally, the agency sets a cap based on the median cost of other homes in the area.
The agency also has certain guidelines regarding fha mortgage refinance products. Some lenders advertise that the home owner can refinance and get up to 95% of the property's current value. In these types of loans, the homeowner can get a new loan that pays off the current loan and pocket any difference. If a homeowner has both first and second mortgage, both loans can be repaid so that the individual only has one monthly payment. Again, if there is enough equity in the property, the homeowner could end up with additional cash that can be used to consolidate other debts or for some other personal purpose. Great care should be taken when borrowing money against one's home for anything other than maintaining or improving the value of the property. Doing so can be a risky financial maneuver. A psalmist prays: "Teach me good judgment and knowledge: for I have believed thy commandments" (Psalm 119:66). There are many financial experts who can provide helpful advice for using money with good judgment and wisdom. These resources may keep someone from making a costly financial mistake.
Lenders also promote streamlined refinancing opportunities through the agency, but these come with additional restrictions. For one thing, a person who qualifies can obtain an fha mortgage refinance even if the current loan is not with the agency. But the streamlined financing is only for individuals who have an existing loan through the agency. Another important criterion is that the homeowners cannot be delinquent in their mortgage payments to be eligible for the streamlined refinancing. In addition, the replacement loan must result in a lower principal and interest payment for the borrower and no cash can be taken out of the equity. For example, suppose an individual has a monthly payment with the principle and interest equaling $800. The amount she sends to the mortgage company each month is higher because it also includes money for the escrow account which pays taxes and insurance when these items become due. A new streamlined fha mortgage refinance loan would need to result in a payment, of the principle and interest, that is less than $800. Even though the homeowner may have $50,000 of equity in the property, she cannot access that money by borrowing more than what is needed to pay off the original mortgage. A benefit of streamlined refinancing is that the amount of documentation and underwriting that is required will not be as stringent as it would be otherwise.
Refinance A Christian FHA Mortgage LoanRefinance FHA mortgage loans are attained by homeowners from lenders for the purpose of refinancing current mortgages. FHA was instituted by the federal government to provide qualified buyers with affordable housing financing options. This refinancing is insured by the FHA, which limits the lender's risk and therefore makes it easier for individuals to obtain.
If already involved with the Federal Housing Administration, then one of these streamline loans could be an excellent program. Refinance FHA mortgage loans offer interest rate reductions without much of the hassle and paperwork that typically accompanies home mortgages. The income and credit qualifications are usually easier to meet than those required for conventional lenders. Yet, the rates for the Federal Housing Administration are still competitive. Even if one has never been involved with the FHA, to refinance a FHA mortgage loan through them is an option worth considering.
The benefits to refinance a FHA mortgage loan are numerous. Many people like knowing that they can own 100 percent of their homes sooner if they refinance. Other homeowners want a little extra cash in their checking accounts each month and use this to lower their monthly payments. Many people apply for these in order to cash out some of the equity they have accrued during the years that they have been paying on their home. This equity can be used for home improvements, vacations, debt consolidations, or practically anything else.
In order to be successful when applying to refinance a FHA mortgage loan, homeowners should carefully research lenders. It is important to be familiar with the lingo of the refinancing world in order to adequately compare the various packages. Be aware of terminology such as, "fixed" and "variable" interest rates, closing costs, equity, settlement fees, and points. Determining what program is best for the situation depends upon how these variables figure into the unique package.
Searches can be performed online when looking to refinance a FHA mortgage loan and many sites have mortgage calculators available. These tools are used to help determine the best refinancing scenario for the situation. Some homeowners consider only the minimum monthly payment to determine the best deal. However, experts advise keeping both short-term and long-term goals in mind when considering refinancing. For example, is saving an extra $100 a month now, worth paying out $10,000 or more in extra interest payments? This could be the scenario if the new refinance term is a longer term than what's left on the current mortgage agreement.
Applying for this loan can be a very wise decision if the conditions are right. God wants us to be good stewards of all he has entrusted to us, and this includes our houses. In order to do this we need to be wise in our undertakings. "If any of you lacks wisdom, he should ask God who gives generously to all without finding fault, and it will be given to him." (James1:5) Research refinance FHA mortgage loans, learn all of the terminology, speak with mortgage lenders, ask questions, and, of course, pray for God's guidance.
FHA loan refinancing is a great way to refinance a home without losing money or threatening a good interest rate. FHA refinancing offers homeowners the opportunity to use their good standing with their current bank in order to obtain a lower interest rate and possibly a lower payment. The only thing that won't change is the amount that the loan is for.
When shopping around for FHA loan refinancing it is important to consider a couple of things. There are certain pieces of information needed to have in order before applying for FHA loan refinancing. Social security numbers need to match the name of the person applying for the loan. This may sound silly, but if recently married or divorced the wrong name may be on record with the right social security number. A major requirement for FHA loan refinancing is to have at least 6 months of on time payments to show the loan officer responsibility enough to pay your new loan on time.
Other factors to consider when looking at FHA loan refinancing are credit rating, residential status, and income. With FHA loan refinancing interest rates may be better and may be able to qualify more easily because FHA loans allow a higher percentage of income towards a house payment. This is good because it will make it easier for someone with blemishes on their credit to refinance. FHA loan refinancing still requires good credit, but there are a lot of factors that are considered when deciding whether or not a person gets a loan.
Even though Christian FHA loan refinancing allows the use of an extra percentage of income towards the house payment, the best thing to do is sit down and figure out a budget. Banks may say that 28% of your income is available for a mortgage payment, but they may not be considering a car that needed to be fixed that is still paying on or 4 kids with braces. Everyone's life is different and cannot simply be generalized by a percentage of income. The last thing to do is get in over your head with a mortgage payment. Its one thing to lose a car, but it's a whole other thing to lose a house because of non-payment. God knows how we should use the money He has entrusted us with. Pray for guidance of where He this situation to go. God doesn't make mistakes, but people do. Follow His guidance and be patient for His answers.