With out many Chicago refinance options with scores under 740 and being able to get the "best" mortgage rates available, many Chicago residents have turned to FHA.
With an FHA refinance you can still refinance at a 620 score or higher with lower mortgage insurance than a conventional mortgage and up to 97.75% (which includes the up front mortgage insurance that is rolled into the loan). FHA rates have also been hovering in the 5% range for about a week now, which is in line with current conventional rates.
There are three types of Chicago FHA financing:
Rate and Term
Cash Out
Streamline
Chicago FHA Rate and Term Refinance:
The FHA rate and term refinance is a program for those of you not looking to pull cash from your property and are looking for a good 30 year fixed low rate. Here are some details of the program:
-30 year fixed rate
-up to 97.75% loan to value including the up front mortgage insurance
-minimum credit score 620
-FHA considers 2nd mortgages/heloc owned/unused for 12 months as a non cash out refinance if you pay them off (a conforming loan would automatically consider a payoff of a 2nd mortgage/heloc as a cash out refinance unless obtained for the purchase of the property).
-no late payment for the past 12 months
Chicago FHA Cash Out Refinance:
FHA changed their guidelines a few months back lowering the max loan to value to 85% cash out. While still decent compared to a conventional cash out refinance, this can only be utilized if you have more than average equity in your property. You must also own your property for 12 months before you can cash out refinance. The 85% is based on appraised value and closing costs, prepaid items and the up front mortgage insurance can still be rolled in to the loan amount.
Chicago FHA Streamline Refinance:
Starting with FHA case numbers assigned on or after January 1, 2010, the FHA streamline refinance is going to be a fully qualifying refinance. In simple terms, you will have to qualify in order to refinance. Most lenders have also up their minimum credit scores to 640 though we still do have a few that will go as low as 620. The only advantage after January 1 is you will still have a choice of doing the refinance with out an appraisal. If you are thinking about an FHA streamline refinance and you don't want to go through the process or qualifying your income, please contact us and we will have an FHA case number assigned to your property before the guidelines change.
For further details of the Chicago FHA refinance programs listed, please visit our website at http://www.MadisonMortgageguys.com
Your Chicago FHA mortgage banker!
Toll Free: 877-240-5810
info@madisonmortgageguys.com
http://www.madisonmortgageguys.com
Visit my blog at http://www.madisonmortgageguys.com/
Recent FHA blog posts:
http://www.madisonmortgageguys.com/
http://www.madisonmortgageguys.com/
http://www.madisonmortgageguys.com/
http://www.madisonmortgageguys.com/
http://www.madisonmortgageguys.com/
http://www.madisonmortgageguys.com/
