(Soybean futures trading) Todays FHA Refinance Mortgage Requirements

Written by Webmaster

Thursday, 02 October 2008

By Roberto Garabell

Are you currently considering refinancing your home? perhaps you have heard how interest rates are at 5 year lows or that FHA refinance loans and their updated programs have become hugely trendy. fortunate for you, both of those things are true making for an admirable refinance opportunity. And it is no more difficult to apply for an FHA loan than it is for a Conventional loan.

Before you determine to refinance, you should know the plain requirements for FHA Mortgages. To be eligible for FHA refinance loans, your monthly housing overheads (mortgage principal and interest, property taxes and insurance) must meet a specified percentage of your gross monthly income. This is called the Top Ratio and it should be below 31%. You must also have enough revenue to pay your housing overheads plus all additional monthly debt. This is called the Bottom Ratio and it needs to be below 43%. These percentages may be exceeded with compensating factors.

Your credit background will also be fairly considered. FHA refinance credit requirements are not totally credit score driven, although it is helpful to have at least a 580 FICO score to obtain a sooner approval. FHA guidelines are written in a way that provides the borrower the benefit of the doubt that there had been, at some point in their past, circumstances past their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, theyre normally going to be credit-eligible for an FHA refinance loan.

If you have had a previous bankruptcy, it may still be viable to get an FHA Refinance. If you have been discharged from a chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA refinance loan. If you are in a chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an FHA loan application.

FHA Refinance Loans provide multiple options to meet the needs of your current home equity scenario. If your home has positive equity, you may be able to refinance up to 98.75% or 97.75% of the appraised value of the home or the amount you are refinancing plus closing costs, whichever is lower. If you wish to take cash out of the property, then the maximum financing amount is either 95% or 85% of the current appraised value, depending on the borrowers qualifications. If you do not have sufficient equity in your home to pay off your current mortgage or cover your refinancing closing costs, then you should ask your lender to consider a Write Down. A Write Down is when your lender writes off the excesss balance owed for the purposes of refinancing a loan. The Housing bill that goes into effect on October 1st provide for a Write Down to 90% of the current appraised value for delinquent mortgage FHA refinances. Offering this option is at the discretion of the lender.

Spencer is an FHA lending expert and has published many articles about the recent changes in FHA refinance requirements. You can find out more information about FHA Refinance Loans and FHA Mortgages at www.FHA-101.com.

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