The Federal Housing Administration provides one of the best first-time homebuyer programs in Utah. Since its inception in 1934, the FHA has been helping homebuyers who would otherwise experience trouble qualifying for the conventional mortgage. The FHA Utah housing down payment assistance program provides friendlier requirements and lenient credit requirements. The flexible requirements are not just the reason why Utah housing first-time buyer program has become a popular option.
The Utah FHA refinance provides more reasons to love the FHA first time buyer program. So, what is the FHA refinance and why is it beneficial? Before we look at some of the benefits of FHA refinancing, here are essentials to know about this great option.
What is The FHA Refinance?
The FHA refinance is a program that allows homeowners with an existing FHA backed mortgage to refinance. The FHA refinance feels just like applying for another FHA loan, but this time takes a shorter period and less hassle compared to first time application.
Is FHA refinancing worthy while you can opt to apply for a new home mortgage? Well, let us look at some of the benefits of opting for an FHA refinance.
There is no Appraisal Required
Utah FHA refinance allows the borrower to use the original terms when refinancing an existing mortgage. This means that the FHA mortgage lender will not come asking for the current home value. This comes with time-saving benefits, while it eliminates the hassle involved in conducting appraisals. In addition, there is peace of mind since the mortgage borrower does not need to feel worried about whether the value is high enough to guarantee a refinance.
FHA refinance Does not require Verification of Steady Income
The FHA mortgage lender will not ask for employment or income verification to approve FHA refinance. This is unlike the conventional mortgage refinancing where you need to provide a proof of income and verify employment. Owing to that, there is no need feeling worried about recent loss of income or unemployment so long as you have an existing FHA loan.
Simple and Faster Application Process
The FHA refinancing involves less documentation and verifications, as I have explained already. This means that the applicant will enjoy a significantly simple and faster application approval. This is compared to the time and hassle involved in applying for a new mortgage.
Enjoy Same Rates as on Regular FHA Mortgages
I have illustrated that FHA refinancing is approved based on existing terms. In addition, the borrower can save in case of lower interest rates.
No Prepayment Penalty
If you opt to pay off the original mortgage early than stipulated period, you can do so without incurring additional charges.
Gives the borrower an opportunity to enjoy lower monthly payments
FHA refinancing gives the borrower an opportunity to enjoy a lower interest rate on the mortgage. This means the borrower will pay smaller monthly payments.
An Opportunity to Switch to fixed Rate Loan
By switching from the ARM to a fixed rate mortgage, the borrower gets an opportunity to avoid a higher monthly payment.
Earn Cash From Home equity
FHA Refinance allows the borrower to borrow against home equity in the case of larger expenses in the future. This means the property can be liquidated for cash in hand.
We have seen the benefits that come with FHA refinancing. Now, let us delve into the specific requirements for Utah FHA refinance, and then look at the different options that are available.
Who qualifies for a Utah FHA refinance?
Here is a full list of the requirements for a Utah FHA refinance.
- The mortgage balance should be current. This means that the applicant should not have missed any payments for at least the last six months.
- Have an existing FHA mortgage for FHA streamline or FHA refinance from a conventional loan.
- The FHA requires that there are some benefits for the borrower to be allowed an FHA refinancing
Before applying for the FHA refinance, it is advisable that the borrower evaluates all of the above requirements to ascertain the conditions are met in full. Now let us evaluate some of the options when it comes to FHA refinancing.
FHA Streamline Refinance
The FHA streamline refinance is available only to the borrowers who have an existing FHA loan. The streamline option suits best when the borrower wants to enjoy a lower interest rate.
Cash-Out Refinance for Existing FHA Borrowers
The FHA cash-out refinances an option for the existing FHA loan borrowers and conventional loan borrowers. The option works by refinancing the existing loan allowing the borrower to access the remaining equity in the form of cash.
Refinancing the Existing conventional loan into FHA loan
Another great option is FHA refinancing from the existing conventional loan. This allows the borrower to take advantage of lower interest rates. Moreover, it is a great option for mortgage borrowers who would like to refinance but do not have a good credit score.
Are you ready to apply under the Utah FHA refinancing? Licensed Utah FHA lender is ready to receive your application. The FHA refinance option is available to mortgage borrowers with an existing FHA mortgage, and borrowers wanting to refinance from the conventional mortgage to FHA mortgage.