home mortgage

home mortgage

new home image by steven

• Overview

  Federal Housing Administration (FHA) loans typically help people who have less than perfect credit purchase or refinance a home. According to the Zillow website, "The FHA program has been in place since the 1930s to help stimulate the housing market by making loans accessible and affordable." FHA insures mortgage loans to protect qualified lenders from loss in the case of default, and requires homeowners to pay a mortgage insurance premium, which is added to the loan amount. Getting out of an FHA mortgage can help you avoid monthly mortgage insurance premiums and in most cases secure a lower conventional interest rate.
  
  

• • tep 1

    Get a current copy of your credit report using an online resource. Review your credit report and verify that your information is being reported accurately.

  • Step 2

    Make payments on credit card balances that are above 30 percent of your credit limit and pay off all past-due collections, charged-off accounts or judgments. The credit requirements for conventional loans are more stringent than the FHA underwriting guidelines. Improving your credit rating and credit score can increase your chance of obtaining a lower-rate conventional mortgage loan.

  • Step 3

    Review loan options with your current mortgage lender. Generally, your current lender is able to refinance your loan for a lower cost than other mortgage lenders. Inquire about conventional loan programs provided by your current lender.

  • Step 4

    Compare programs from several mortgage lenders using a comprehensive real estate lending website. You can refinance your FHA loan by selecting a conventional loan from a network of lenders.

  • Step 5

    Submit your application for a conventional mortgage loan. Forward items that your loan officer will need such as bank statements, tax records and pay stubs.

  • Step 6

    Sign your closing documents to finalize your refinance transaction. Meet with a title company representative to review and sign your loan documents.