Refinancing a mortgage loan is the process of taking another mortgage loan using the same assets and property so as to pay off the already existing mortgage loan. However, the only difference is that the new loan is taken at favorable interest rates and has better terms.
Getting a mortgage refinance loan is an attractive option for somebody who is stuck with increasing monthly payments that have become unaffordable. Apart from this, loan refinance is perhaps the easiest way to escape from foreclosure, get an ARM mortgage loan converted to a fixed mortgage loan or use the equity on the home to get cash for home improvements.
One popular means of refinancing existing mortgage is to apply for a FHA refinance loan. An FHA refinance loan is a federal assistance mortgage loan that is insured by the United States Federal Housing Administration or FHA. As a result, the loan provided by the lenders is insured against any possible defaults. The FHA guarantees a percentage of the loan that is paid directly to the lender in case of a foreclosure.
One does not require any FICO scores or credit reports in order to qualify for FHA refinance loan as the credit and income qualifications are not very stringent. Moreover, it is easier to consolidate first and second mortgages into a single loan using this loan program. Loans are usually provided to borrowers at competitive interest rates and favorable repayment terms. Even the closing costs this type of loan are regulated by the FHA.
About Author: Pauline Go is an online leading expert in finance industry. She also offers top quality finance tips like :
Guide For Top Mutual Funds, Internet Payday Loan Regulations, and Online Forex Currency Trading Information.
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