The FHA loan program is a great way to buy a home in Orange County, CA. FHA allows for a low down payment and fairly flexible qualifying. However, it does come with a price. The Monthly Mortgage Insurance, which was fairly low a few years ago has nearly tripled in the past 24 months. The good news is that the housing market is staging a recovery which has pushed property values to levels that are now making it possible to refinance into a Conventional loan and drop the mortgage insurance altogether. The best way to find out if a refinance into a Conventional loan makes sense is to contact a loan officer. A good loan officer will check the latest sales comparables for your neighborhood and prepare loan scenarios and a Side by Side Analysis.
Another option for those who are eligible is a refinance into a VA loan. For those Veterans who are eligible, the VA loan program has several advantages over other types of financing. It is possible to refinance up to 100% loan to value. You can even do a cash out refinance at 90% of your properties value. And with NO mortgage insurance!
VA loan guidelines are fairly flexible when it comes to prior credit issues like foreclosure or bankruptcy, especially when compared to any other type of financing. While some mortgage companies will only lend within the counties 100% financing limit, other lenders are known to close VA loans with loan amounts as high as $1,500,000. There are specific guidelines for determining the maximum loan amount when the property value is over the Los Angeles and Orange County 100% financing limit of $668,750, but VA is still far more flexible than other types of financing. Also, VA offers very competitive 30 year fixed rates, especially when compared to other "Jumbo Loan" programs.
Is Refinancing Right for Me?
The best way to find out if refinancing out of an FHA loan is the right decision, or even possible, is to contact a local Orange County lender who can prepare custom loan scenarios. Also, by reviewing a Side by Side Analysis for your current loan as it compares in the long and short run to a refinance is an important step in making the right decision.