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Rate Term Refinance

FHA rate term refinances are very common for those looking to consolidate two mortgages or looking for a mortgage loan that has reduced private mortgage insurance. FHA offers Mortgage Insurance Premium (MIP), and is generally much lower than paying the normal PMI. Many borrowers are looking to use FHA to refinance out of their subprime mortgage which may have a higher rate or maybe ready to adjust. Most borrowers refinance into an FHA mortgage due to the low FHA rates, and low PMI costs due to a high loan to value.

Unlike subprime mortgages, FHA loans do not have prepayment penalties. You may choose to have a 30 year fixed mortgage or an adjustable rate mortgage. FHA ARM loans adjust 1% per year which may be very convenient for those looking for a low rate FHA ARM.

Rate Term FHA refinances can go up to 97.25% of the loan to value. You may combine two mortgage loans, but the 2nd mortgage needs to be at least 12months old if taken out after the 1st mortgage.
FHA loans also require to be the first lien holder on the subject property. Subject property must be owner occupied, and must also meet property standards.