If you’re considering mortgage refinancing with an FHA mortgage loan there are several things you should know. Government backed FHA loans make it easy to qualify for a mortgage refinance loan; however, the requirement for private mortgage insurance is a downside. Here’s an article on MortgageLoan.com with the basics you need to know about FHA backed mortgage refinance loans:
Just what is an FHA mortgage? Who can obtain one? What are the advantages and disadvantages compared to other types of home loans? Pretty straightforward questions, but it can be hard to find all the answers in one place. The following summarizes some of the most important things borrowers need to know about FHA mortgages.
The biggest downside to an FHA mortgage refinance loan is higher cost. If you can qualify for a conventional mortgage refinance loan you can avoid paying FHA mortgage insurance. This insurance requirement that accompanies FHA home loans does nothing to protect you as the homeowner but only protects the lender from certain losses if you foreclose. All the insurance does for you is cost you money.
Depending on your financial situation an FHA mortgage refinance loan could be your only option. If you’re a veteran keep in mind that VA home loans have the same benefits of FHA loans and do not require mortgage insurance. In addition to higher costs inherent to FHA mortgage loans you’ll want to keep an eye out for unnecessary lender and broker fees. You’ll still be required to pay closing costs and an origination fee for the FHA loan; one of the most common mortgage mistakes is overpaying these fees.
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