FHA Refinance Loan Advice
Shop Around for Your Lender
There are more options than some borrowers realize and even a federal agency like the Federal Trade Commission (FTC) tells consumers to look at their options, which as the FTC official site points out, include thrift institutions, commercial banks, mortgage companies, and credit unions.
According to the FTC, “Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker.
Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you.” Using a broker can help save you time but if you aren’t sure what kind of refinance loan you need, some additional discussion is in order.
Choose the Right Refinance Loan
FHA loans, no matter which type you need, have zero penalty for early payoff. Beyond that, choosing the right refi loan type for your needs is crucial. Tell your lender what your financial goals are for the loan--do you need a lower payment?
Do you want to remodel as well as refinance? Let the lender know because special needs require special loans. You can do a no cash-out refinance to get out of an adjustable rate mortgage, you can apply for cash-out, and those who need to refinance in order to catch up on mortgage payments will have a different discussion with their lender than the people who want cash out.
If You Have Credit Problems
Before you fill out any loan paperwork, it’s best to review your credit report in detail. The Federal Trade Commission official site reminds consumers that credit issues that come “from unique circumstances, such as illness or temporary loss of income”, will not necessarily limit your loan choices to only high-cost lenders--shopping around for the right lender is key, as mentioned above.
Take the FTC’s advice and have a conversation with your loan officer about how “your past credit history affects the price of your loan and what you would need to do to get a better price.” DO NOT hesitate to negotiate with a lender, you may find the results work out better for you than you realize.
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