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Income and credit are large factors when determining eligibility for FHA refinancing. Everyone must show they are able to meet the monthy costs of the home eith all epenses and debts. The monthly housing costs must not exceed 31% of the monthly income. In addition, the income-to-debt ratio for all monthly expenses, including housing, must not exceed 43% of the monthly income.
The credit history and score of the applicant must meet the minimum requirements of the FHA lender. In most cases, lenders require a minimum credit score of 640. However, some lenders will accept lower scores. The overall credit history should show a pattern of regular, on-time payments with no defaults or collection activity. A couple of FHA lenders still accept some derogitory history if the borrower can show that some agreements have been made.All borrowers must be U.S citizens and residence to be approved. candidates must provide proof U.S. residency, a valid Social Security Number and meet the legal minimum age requirements for their state. Substitutions for a valid Social Security Number will not be accepted.
Requirements for an FHA mortgage product such as FHA refinance loans require copies of your income tax returns to verify the actual amount of money you report to the government. If your job situation has changed since your last tax filing, you may be able to furnish proof of income through your new employer.
If you meet the criteria for a FHA loan, your lender still has to approve the loan. The bank is not getting paid during the forclosure process, especialy during a sluggish housing market. The lender would be holding on to that property for a long time. This is a good incentive for the lender to agree to FHA home refinance.
FHA refinancing loans are designed for owner occupied properties only. The homeowner is required to maintain residency within the home during the duration of the loan. You can only have one FHA loan on your credit report. FHA refinancing options are available for single family homes, as well as condominiums, manufactured homes and multi-family residences.
FHA refinancing requires that homeowners have established equity in the home. The equity amount required varies based on the type of refinancing option that is selected. Some FHA refinance options have equity requirements as low as 3.75-5.00%, while other FHA refinance options require minimums of 15 to 25%.
Several types of FHA refinancing options exist. Depending on what type of mortgage you select, you might need to have more requirements met. Homeowners who hold a first mortgage through FHA meet the requirements for a streamlined refinancing option. This option is designed to cut down on additional paperwork. In this, appraisals, credit underwriting, debt ratios and income verifications are not required.
FHA Refinance & FHA Refinancing with American Wide Loans
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