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Before you decide to refinance, you should know the basic requirements for [ http://comparefhahomeloans.com/fha-refinance/ fha mortgage]. To be eligible for FHA Refinance Loans, your monthly housing costs (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 income to pay your housing costs 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 loan requirements are not totally credit score driven, although it is helpful to have at least a 580 FICO score to obtain a faster 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 beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA refinance loan.

Types Of FHA Refinance Loans

1. Rate & Term refinance loans are for those who have a high interest rate on an existing loan. This loan must be a sub prime mortgage loan for you to qualify. People who have this loan also have bad credit and this will allow you to decrease your interest rate and monthly payment.

2. For those who need to eliminate some debt and have only one monthly payment, choose debt consolidation fha refinance Loans. The loan specialists who assist you will arrange payoff of your existing debt and you won't have to deal with the high interest rates any longer.

3. Many just want to cash out of their home equity and use the money however they choose. This option is available as a cash-out refinance.

4. If you want to refinance an existing [ http://www.dng.com/member/182264 fha loan] to reduce your rate and payments, choose the FHA Streamline Loan option. No credit check is required and the only condition is that you have made your monthly payments on time for the past year.

As you can see, there is a loan available for everyone and every situation. There are many advantages to choosing an fha loan. FHA Refinance Loans are very easy to qualify for as a local bank does not have to insure the loan. The FHA takes care of this.

Top Three Things to Know About fha refinance Loans Refinance loans allow homeowners to enjoy the benefits of investing in their property year after year. Also, refinance loans can actually help in the FHA loan process and get you a better deal! However, like all major investments careful steps must be taken before the process begins, so here are the top 3 things you need to know about FHA refinance loans.

Cash Out Refinance The Cash Out FHA refinance option is particularly useful to homebuyers whose property has increased in market value since the home was purchased.

Streamlined refinance Another refinance option is streamlined refinance. This refinancing option is known as streamlined because it allows you to reduce the interest rate on your current home loan quickly and easily, many times without an appraisal. FHA Streamlined refinance also means there is less paperwork to do for your lender, and that means less of your time and money is used.

FHA Refinance - Non FHA Loans Finally, FHA Refinance loans can be used to refinance any non FHA loan to an fha loan. If you have a conventional mortgage, you may be able to use the FHA refinance loan to refinance up to a LTV (Loan to Value) of 97.75% provided that they are not getting any money at closing or paying off anything other than existing mortgage(s)