If you currently have a mortgage that you are not happy with for any reason, you could always consider refinancing it. Refinancing a loan is something you are free to do whenever you would like; however, it is not something you should do all the time, as it costs money to do. Here are some of the top reasons you might be thinking about refinancing your current mortgage to switch to FHA loans.
Your Interest Rate Is Too High
One of the key reasons any homeowner would consider refinancing is due to the high interest rate they have on their loan. A high interest rate will result in spending a lot more money on your house loan than necessary, which is why people often refinance when they are able to lock in a lower rate of interest with a new loan. Being able to drop your interest rate by even one-half of a percent can sometimes make a huge difference in the payment amount you have to make each month, and it can greatly reduce the total cost of the loan. You can ask a mortgage lender to tell you what your new payments would be if you refinanced, and this is a good way to determine if you should go through with it or not.
You Have an ARM
Secondly, many people will turn to refinancing when they have a mortgage with an ARM. ARM stands for adjustable rate mortgage, and this means that your interest rate will change on a certain date in time. If you suspect that the interest rate will increase on this date, it might be worthwhile to shop around for a different loan, and FHA loans offer fixed rates, which means you would never have to worry about your rate changing once you get the loan.
Your Credit Is Less than Perfect
The other thing to understand is that FHA loans are ideal for people who have less than perfect credit, and they are also good for people who do not have a lot of equity in their homes. If you meet any of these characteristics, an FHA loan refinance could be a good option to consider.
Refinancing a mortgage loan is often a good thing to do every five years or so, as it can make a big difference in the amount of money you are paying for your loan. If you have questions or need help, contact a mortgage lender today that offers FHA loan services.