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Refinancing a mortgage can provide a homeowner with many benefits, and many are interested in refinancing their traditional mortgage into an FHA mortgage to take advantage of low-interest rates.
Depending on the specific circumstances, this step may lower the monthly payment, reduce interest charges, adjust the loan term so that it is more beneficial for achieving financial goals, and more. Those who are interested in refinancing in an FHA mortgage may consider these steps.
There are specific rules in place regarding refinancing under the FHA program. For example, the loan amount may be up to 96.5 percent of the value of the home, but the homeowner cannot take cash out of the refinance transaction.
If cash is taken out, the loan-to-value limit under the FHA program is usually 86 percent of the property value. Homeowners should be aware of these rules to ensure that the FHA program is the best fit for their unique goals.
The next step for homeowners to take is to review their own financial goals and to define their reasons for refinancing. In addition, it is important for homeowners to contact their current mortgage company to learn more about their current interest rate if there are a prepayment penalty and the current loan balance. Estimating property value is also important.
Homeowners may have a reasonable idea about property value, or they can contact a real estate agent for a valuation. When all of this information is taken into account, the homeowner will have a better idea about what to expect from refinancing.
Each homeowner will be in a unique situation regarding current loan details, property values, and goals that they want to achieve through refinancing. It can be confusing to decide if refinancing is the right move to make, and it can be even more complicated to determine which loan program is a best-fit for the goals of the homeowner.
Those who are interested in refinancing from a traditional mortgage into the FHA loan program should contact Sammamish Mortgage to discuss the options and to determine if this is the best fit option for them as a first step in the loan process.
Are you ready to take out a mortgage? Sammamish Mortgage can help. We are a local, family-owned company based in Bellevue, Washington, and currently lend in all of Washington, Oregon, Idaho, and Colorado. Since 1992, we have been helping borrowers secure a variety of mortgage programs. Please contact us if you have mortgage-related questions.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.