If you’re one of the many Americans currently paying their mortgage under an FHA loan, you may be looking at your monthly payments and wondering if a refinance would make sense. Perhaps you feel your interest rate is too high or maybe you’re just looking to pay your loan off quicker. There are plenty of reasons to look into refinancing, but sometimes the biggest questions are: where do I start, and what type of refinance program is the right one for me?
With so many different rates, terms, and potential charges that come with refinancing, it’s easy to get confused about which option provides the best benefit for you. At Evolve Home Loans, we’re here to help you with all of your financing needs and questions, and would like to take a few minutes to look at two of the best options when it comes to refinancing your FHA loan.
FHA Streamline Refinance
Available only to current FHA mortgage holders, FHA Streamline Refinancing is an option that is based on being a convenience to the borrower.
Here are a few ways that FHA Streamline Refinancing offers an easier and lower stress option:
- FHA Streamline Financing does not require a property appraisal.
- With FHA Streamline Financing, income verification are not required.
- FHA Streamline Financing is an option that does not take current debt to income ratios into consideration.
- Under FHA Streamline Refinancing, qualifications with a credit score as low as 600 are possible.
- Less requirements makes FHA Streamline Financing a faster process, in most cases closing in under 30 days!
FHA Streamline Refinancing is a great choice for a quick and overall easier refinance option. However, if long-term savings is your ultimate goal, it may be that a conventional refinance option is the right one for you. What does a conventional refinance offer that FHA Streamline Refinancing doesn’t?
FHA to Conventional Refinance
Converting your FHA loan with conventional refinancing does require more qualifications. Unlike FHA Streamline Refinancing, the buyer will be required to get an appraisal, supply proof of income, and usually requires a higher credit score.
However, benefits of conventional refinancing include:
- With 20% equity in their property and a good credit score, many conventional refinancing options allow for the owner to stop paying mortgage insurance, which can save thousands of dollars per year.
- With better credit scores and proof of income, conventional refinancing often means a lower interest rate may be obtained.
- Less interest and a lack of PMI can help make a mortgage payoff faster, and is ideal for long-term savings.
At Evolve Home Loans, we’re aware every homeowner’s situation is different. Reasons to refinance vary, and what is good for one person or family may not be beneficial for the next. Regardless of the situation, our team of professionals is here to help guide you through the process of choosing which refinancing option is right for you. Please don’t hesitate to reach out to us today!