Fha Loan

FHA Refinance Loans-The Basics And Possible Complications

Anybody who is financing their home through FHA and is looking for extra money may want to consider a refinance loan.  The money garnered from refinance loans can be used to consolidate debts, changing over to a fixed rate mortgage or a special project such as vacation or home repair.  It’s also good for people struggling to keep up with high payments.  If you’re at risk of foreclosure, this is one option that can save your home.

FHA offers what they call an FHA Secure refinance loan.  In order to qualify, your interest rate must have reset after June 2005 or will before Dec 2009.  You also must have steady employment, steady income, 3% equity or cash invested in the home, and a history of making on-time payments on the mortgage before the teaser rates expire.

Several companies are involved in the loan—the escrow company, the inspector, the investor, and the real estate agent.  Any mistakes made by any of these companies can result in a delay in the decision making process.  The escrow company must make sure everything is in order on their end or it could delay the process.  If they get busy, lose paperwork, or get too bogged down with clients, it could extend the process by several weeks.  The real estate agent may also cause setbacks.  If the files weren’t signed as they should be, it can cause a delay of up to 21 days.  If they don’t return your calls, this can also add weeks to the process, especially if they went on vacation before the deal was completed.  If they don’t properly communicate with the client, this will also extend the procedure.  The seller must stay motivated, catch any defects in the home, and resolve all issues with liens.  The process can hit several snags along the way on the part of the investor as well.  Let’s say at the last minute they decide they don’t like the property or the information provided turns out to be inaccurate or incomplete.  This can delay the process for at least 14 days or kill the deal altogether.  If paperwork gets lost, this can cause a delay of anywhere from a week to nearly a month.  Finally, personal problems at any of these checkpoints (divorce, marriage, illness, death in family, etc.) will also complicate things.  Finally, let’s say the inspector is picky, makes an error, or makes the seller mad.  This also makes things harder.

Getting a refinance loan through the FHA can be a life-saver.  They’re convenient, and they let you lower your interest rates and monthly payments.  If you have a FHA mortgage, contact them and find out what your options are concerning a loan.