The most popular mortgage in our market is without a doubt the FHA Loan. Unlike its perception, FHA Loans are not just loans for people with bad credit, but in fact all kinds of people get approved under this loan program. There could be a bunch of reasons why an individual had to go with an FHA Loan, for example: prior bankruptcy, short sale, foreclosure, deed in lieu of foreclosure, high debt to income ratio, or any other factors that would otherwise get them denied for a Conventional Loan. The FHA or Federal Housing Authority is a subsidiary of the United States Department of Housing and Urban Development, and is responsible for the rules and regulations associated with FHA Loans. The FHA does not originate loans but rather insures the loans that are originated by FHA lenders. So given these lenient guidelines and requirements by FHA, there are still people that may look to Refinance FHA Loan To Conventional Loan.
If you are looking to Refinance FHA Loan To Conventional Loan you must first calculate if the benefits are going to be worth it for you in the end. Conventional Loan rates are extremely sensitive to credit score and if you don’t have a 740+ FICO credit score, there is no way you are going to get the best interest rate for your loan. On top of needing 740+ credit score, you are also going to need at least a 20% down payment in order to secure the best interest rate available. For every 20 points below 740 you are, your interest rate will increase accordingly. The one positive feature over when looking to Refinance FHA Loan To Conventional Loan is that with a Conventional Loan, once you have at least 20% equity in your home the PMI automatically is removed. This varies from an FHA Loan where the Mortgage Insurance Premium (MIP) is paid for the duration of the loan. When you are trying to Refinance FHA Loan To Conventional Loan you might be better off with a higher interest rate on a Conventional Loan if it works out that the lower interest rate FHA Loan plus MIP is higher than what your conventional loan payment would be otherwise.
As you can see there is a positive if you want to Refinance FHA Loan To Conventional Loan, but unless you already have equity in your home to remove PMI or have excellent credit, you may be hard-pressed to save any money in the end. My advice to you is to work with a professional like myself who has a pulse on all the different mortgage loan programs and can put you in the right loan TODAY. Call me any time day or night, weekday or weekends, 7 days a week at 888-900-1020, email at email@example.com, or visit www.loanconsultants.org for an applications or additional information and articles about different loan programs.