Posted by admin on November 6, 2010
With most low and no money down mortgage products falling by the wayside over the past few years, more and more consumers are turning to FHA home financing solutions. According to a 2009 NYTimes.com article citing Inside Mortgage Finance as its source, FHA loans represented less than 2% of the mortgage market back in 2005 and 2006 and have since exploded to capture over 17% of new residential mortgages. Today, millions of homeowners may benefit from an FHA streamline refinance. If a consumer currently has an FHA mortgage, a streamline loan may enable them to refinance with very little paperwork, possibly no appraisal and some lenders and brokers may not verify income or employment, or charge lender fees. With mortgage rates near record lows, people can refinance to save money on their monthly housing obligations or even reduce the duration of their repayment period (i.e. going from a 30 year loan to a 15 year mortgage).
The Federal Housing Administration (FHA) provides mortgage insurance on home loans offered by FHA approved lenders. This insurance helps to protect mortgage lenders against potential losses resulting from borrower default. Beyond just offering a low down payment solution, FHA loans are also known for having less strict financing guidelines in that credit standards and debt-to-income ratios may be slightly more lenient than what is available through other conforming mortgage loans products. FHA mortgages are available for single family homes, duplexes, triplexes, and 4 unit homes. There are also a handful of lenders out there that offer FHA mobile home loans. You can find a list of FHA approved lenders on HUD’s web site at http://www.hud.gov/ll/code/llslcrit.cfm.