FHA Refinance Loans and Interest Rates
With rates so low, what do you need to know about refinancing to get a better mortgage rate?
Interest Rates Are Always Subject to Change Unless You Have a Rate Lock Commitment
If you are shopping around for a loan and have not yet applied for a refinance, the rates you see today may change tomorrow.
That does not always mean they are subject to dramatic change, but without an interest rate lock commitment from the lender saying that for X amount of time the rate will be locked in for you, you should not be surprised if the rates are different when you do commit to the loan.
Interest Rates Are Affected by Multiple Factors
And those factors include your credit scores. Your lender may offer a different rate to those with more competitive FICO scores, which means you should start working on improving your credit or maintaining your current scores at the same time you are planning for a refinance loan.
FHA Home Loan Interest Rates May not Be the Same From Lender to Lender
One of the best reasons to shop around for a loan is to find the lender offering the most advantageous rates and terms. If you do not shop around for a home loan, you won’t know who offers the lower interest rate and you may cheat yourself out of savings over the lifetime of the loan as a result.
There Are Many Types of Refinance Loan Options
Some borrowers don’t explore their refinance options because they do not realize that FHA refi loan options include cash-out options, Streamline Refinancing for those with existing FHA loans that include no FHA-required credit check, and rehab loans to help people renovate their houses.
Your specific mortgage loan needs could require one of these types of FHA refinance options, and your participating FHA lender can help you choose the right refi loan for the purposes you have in mind.
Remember, not all participating FHA lenders offer all available home loan products, so shopping around for the right lender is key for this aspect of your refinance loan journey; tell the lender your goals for the refinance loan and see what options are open to you at that institution.
Sometimes It Pays to Refinance
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