Subprime Mortgage Refinancing

Many People Talk About Subprime Mortgages And How They Have Helped Cause The Mess That We Are Currently In. Many Homeowners Are Wondering If They Can Still Get Subprime Mortgage Refinancing?

Many homeowners are not the best mortgage prospects but are wondering if they are still able to get subprime mortgage refinancing. Many forms of subprime mortgage refinancing have gone away because of how the economy has changed. There is still some types of subprime mortgage refinancing that are available to homeowners.

The only form of subprime mortgage refinancing that is available in the market is FHA mortgages. An FHA mortgage is a government backed mortgage program. The government sets mortgage guidelines that private mortgage companies have to follow. If they follow these mortgage guidelines the federal government will insure the loan and buy it as a mortgage backed security on the secondary market. Because the government buys up these loans they lowered the guidelines so that more Americans have the opportunity to own their own homes.

In today’s mortgage market all forms of conventional lending will require at least 20% of equity in your home and they will also require you to have at least a 680 credit score to get approved. They will also make you show significant assets and cash reserves. Also they are picky about the area and type of property that they will mortgage.

With the FHA mortgage it really is subprime mortgage refinancing because you only need to have a 620 credit score. Also you are able to refinance up to 97.75% of the value of you home. Also they do not require you to have very much assets or cash reserves on hand.

For many homeowners they forced to do this type of subprime mortgage refinancing because they will not qualify for any other types of mortgage refinancing. The only down side to this type of subprime mortgage refinancing is that you may have to pay a little more money. The FHA mortgage refinancing rates are usually a little bit higher than conventional mortgage refinance rates but they are still fairly competitive. Also you will have to pay mortgage insurance. Every month you will have to pay a small amount of mortgage insurance because this is subprime mortgage refinancing. Overall it has become much harder to do subprime mortgage refinancing but it is still doable for some homeowners.

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