Looking for ways to lower your interest rate or monthly payment? Refinancing your FHA loan might just do the trick. However, it is important to understand the current market to make the correct decision. Furthermore, each refinancing option and lender comes along with different requirements, something also to keep in mind. Let us try and understand more about home refinance in Greenville and also about the various FHA loan lenders in Greenville.
Two of the most common option for refinancing your FHA loans are-
- Refinancing into a conventional loan
- Applying for an FHA streamline refinance
Both options come with their own benefits, however, has a set of requirements that need to be met.
Requirements for conventional refinance
Compared to FHA refinancing, Conventional refinancing comes with stricter requirements. Let’s look at them in detail.
- A minimum credit score of 620- A good credit score is an indication that you are financially responsible and are willing to pay your bills on time.
- Equity of at least 20% Having an equity of at least 20% is a great way to avoid private mortgage insurance charges.
- Ability to pay to refinance closing cost a closing cost can be between 2% to 5% on refinancing loans. Mortgage lenders make sure that you have enough cash to cover that.
- Documents that guarantee creditworthiness Mortgage lenders also check tax returns and credit reports along with other aspects to ensure the creditworthiness of the clients.
Requirements for FHA Streamline Refinance
As compared to conventional refinancing, FHA streamlined refinancing is much more convenient. No credit score check is required, and there is no minimum equity to look into. The biggest requirement, however, is to have an existing FHA loan. The other requirements include
- There should be no outstanding mortgage payments. If you are someone looking to apply for FHA streamline refinance, it is important that you are up to date with your payments.
- Another important thing to make sure of is the fact that you have a solid history of at least six months of on-time payments.
Advantages of Refinancing via FHA streamline
It goes without saying that refinancing via FHA streamline is much more convenient for many. Let us look at some of the advantages of refinancing via FHA streamline.
- No appraisal is required.
- No verification of income or employment is required.
- Easier and faster process
- Rates are similar to the regular FHA mortgages
- There is no payment penalty.
These are some of the aspects related to home refinance in Greenville and also about the various FHA loan lenders in Greenville and how FHA streamlined refinancing is beneficial for you.