Rethinking that FHA Home Loan

June 25, 2014

If your home loan is currently from the Federal Housing Administration, there are several options available to significantly reduce your monthly housing payment.

One is FHA Streamline Refinance. You may qualify for this loan where no appraisal is required, the up-front mortgage insurance is minimal and the monthly mortgage insurance is based on a factor of .55 percent vs. 1.35 percent. Plus, FHA interest rates are very attractive.

Another option is a conventional mortgage. Your principal balance may be low enough now to consider refinancing into a conventional loan. If your loan balance is now 80 percent of or lower than your home’s value, you can eliminate the monthly mortgage insurance by refinancing to a conventional loan. And, even if the loan-to-value ratio is a little higher than 80 percent, the mortgage insurance is less costly on conventional loans.

Last, consider Veterans Affairs loans. If you are a veteran, you may be able to refinance your FHA loan and do away with mortgage insurance. Cash out refinances on VA home loans can go up to 100 percent of your home’s value. And, if you receive military disability income, the up-front VA funding fee is waived. Plus, as with FHA, interest rates are very affordable.

JoAnn Moore is a Licensed Mortgage Professional, Certified Military Residential Specialist. She is owner and president of The Mortgage Market of Delaware in Georgetown. Contact office at 302-855-1306, cell at 302-236-1229. Email