June 6, 2016
Refinancing a home loan can be just as big a decision as the original purchase of the home itself. It’s always a good idea to take extra time to plan, budget, and save up for any major loan, and a refinance loan is no exception.
If you are considering your options for a home loan refinance, there are likely a number of questions you need answered as you prepare for the new loan. Here is a list of some common questions about FHA refinance loans that can help you get ready for your application.
What refinance loan options are available from the FHA?
FHA refinance loan options include cash-out and non-cash out refinancing. You can also apply for an FHA Streamline Refinance loan which uses your original application data in many cases to apply for the new loan. For seniors age 62 and older, FHA reverse mortgages are also an option.
Can I refinance a non-FHA loan with an FHA mortgage?
In most cases, a borrower can refinance a non-FHA loan using cash out or non-cash out FHA refinance loans. FHA Streamline refinancing is for existing FHA mortgages only. FHA Reverse mortgages can be taken out on a home even if it was not purchased with an FHA mortgage loan.
What about interest rate options?
Borrowers can use FHA refinancing that offers a fixed rate or adjustable rates. Borrowers also have the option to purchase discount points and for some FHA refinance loans these points can be financed (with certain limitations on the amount of points that can be included in the loan amount).
Are FHA Cash-Our Refinance Loans available for investment properties?
No. FHA cash out refinancing is for owner-occupied primary residences only. There is an occupancy requirement as a condition of loan approval.
Can I apply for an FHA Streamline Loan for a property that wasn’t purchased with an FHA mortgage?
FHA Streamline Refinancing is for existing FHA mortgages only.
Can I include energy efficient upgrades into the loan amount?
FHA refinancing loans feature something called the FHA Energy Efficient Mortgage or FHA EEM. This allows additional funds to be added to the loan amount for the express purpose of installing approved energy efficient upgrades to the property.
What FHA refinance loans allow me to take cash at closing?
FHA cash-out refinancing loans are the only loans that permit cash back to the borrower at closing time. Energy efficient upgrades may, depending on circumstances, require some type of disbursement to pay for upgrades, but the borrower cannot, except for refunds, take cash back “free and clear” on non-cash out refinancing loans.
Do all lenders offer all FHA refinance loan options?
What is offered by a participating lender may vary depending on a variety of factors. It’s best to discuss your needs with a loan officer to see what may be possible at the financial institution of your choice.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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