FHA Refinancing Guidelines
Recession is surely talking a toll on many people. The current economic situation renders many families to be homeless as mortgages can’t be met anymore. Refinancing seems to be the common choice for many to keep their houses.
One of the refinancing options for Americans right now is through the Federal Housing Administration. It is a federal government agency that helps people to get loan for their houses by insuring private loans. FHA refinance houses loaned through companies approved by FHA. Like with any type of loans, not everyone qualifies for FHA refinancing.
When a loan is applied through FHA, the money to refinance or purchase a house doesn’t come directly from the agency. Their main task to guarantee the loans so there would be lower risks for lenders and increasing the borrowing power of people who qualifies.
To qualify for FHA refinance loan, the borrower should be employed in a stable and reliable position. Stability and reliability is often shown by being employed by one company for 2 years and having consistent, if not increased, income. Good credit history is very essential as well.
When applying for a loan, a lot of information are needed by FHA. Make sure you gather all vital information in the past 2 years about addresses you lived at, Employer’s name and address including your monthly salary, W2 and Income tax forms. The W2 form is needed to be secured from you previous employers if you have had multiple employers in the past 2 years. If you don’t have these forms, you would need to visit your previous place of employment and secure a copy of it. If you no longer have your tax forms, you can get a copy of it from the IRS or even order copies online.
If you had credit problems in the past, FHA could recommend a Consumer Credit Counseling program for you to avoid being denied of a loan. It would be good if you have at least a one year satisfactory payment history before applying. It is also advisable to not to make major credit purchases when applying for an FHA refinance loan. Your current debt has a lot of bearing in your loan application as it is being calculated in the debt to income ratio.
In these present times, FHA is really becoming a great help for a lot of people who wants to refinance or purchase a house. If you need to know more information about it, there is a lot of info available online and on the FHA website.
