How to Qualify for an FHA Mortgage Refinance
- 1). Show proof of steady employment. To obtain an FHA mortgage refinance, lenders look for steady employment. This generally involves maintaining the same employer for at least two years, or working in the same field for two years. Individuals who frequently change occupations or fields may be unable to acquire an FHA refinance. The lender will request copies of paycheck stubs, tax returns or W-2's.
- 2). Wait at least three years after a bankruptcy. It's possible to refinance a home loan after bankruptcy. However, if you're looking to obtain an FHA mortgage refinance, any serious credit mishap such as a bankruptcy or repossession must be at least three years old.
- 3). Improve your credit score. Although credit scores don't impact a lender's decision to approve your FHA mortgage refinance application, having a high credit score results in a lower interest rate. In turn, you'll enjoy lower monthly payments. Check your credit report before applying for a loan. Take steps to boost a low score by eliminating high debts and paying your bills. Also avoid opening any new lines of credit.
- 4). Pay your existing mortgage loan on time. To qualify for an FHA mortgage refinance, your current mortgage loan must be in good standing. In other words, the mortgage loan cannot be delinquent.
- 5). Complete a loan application. Contact a bank or mortgage broker and express your desire to obtain an FHA refinance. After completing your application, the lender will review your employment/income history and check your credit report to see whether you qualify for a mortgage refinance. Ideally, mortgage payments should be no more than 30% of your gross monthly income.
Source...