Articles in Category: FHA Refinance

October 18, 2024

When Can I Refinance An FHA Loan?

When can I refinance an FHA loan? That is a common question and one that is addressed in the FHA loan handbook, HUD 4000.1. There are rules that govern how and when you can refinance your home loan and those rules will vary depending on the type of refinance loan you seek. Most FHA home loans, including refinance loans and even reverse mortgages, require occupancy as a condition of loan approval. In the case of FHA Cash-Out Refinance loans, occupancy is necessary for at least one year before the new loan. From HUD 4000.1: “Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior to the | more...

October 1, 2024

Intro To FHA Refinance Loans

By Bruce Reichstein

The Fed announced a substantial rate cut in 2024. That action has more homeowners thinking about their refinance loan options and how they can take advantage of potentially lower rates to come. Refinancing helps some borrowers save money in interest payments over the long term. It can also, depending on circumstances, help you get into a lower monthly payment. Once rates have fallen to the right levels (for some borrowers) these options get more realistic than they have been in the past two to three years. Refinancing can also result in cash back to the borrower once the original loan has been paid off and the associated closing costs dealt with. Not every refinance loan offers this, but FHA loan programs do include cash-out options. If you need to refinance | more...

September 19, 2024

Refinancing Questions To Ask Before You Apply

By Joe Wallace

Are you looking for a refinance loan? Refinancing your home loan can be a smart move for some homeowners, especially in times of falling rates. A 2024 Fed rate cut of half a percent means mortgage loan rates may soon begin coming back down to earth, however gradually that process may be. Potentially lower rates mean more borrowing options, especially in expensive housing markets like New York, California, and Washington, D.C. Smaller housing markets may also benefit. More affordable loans, rising property values (depending on the market), and the ability to pull more cash out of the home in a refi loan situation make applying more attractive. Is your long-term home loan goal to save more money over the term of the mortgage? Or do you need lower mortgage payments | more...

September 12, 2024

Need An FHA Refinance Loan?

By Joe Wallace

What do you need to know about FHA refinance loans? If you are considering your options and aren’t sure about some aspects of the FHA refinance process, you may find some answers to your questions below. FHA Refinance Loan FICO Score Requirements FHA refinance loans typically require credit checks and appraisals. There is one exception. There is no FHA requirement for either when you are applying for an FHA Streamline Refinance mortgage. If you need to refinance but worry about your ability to qualify for an FHA mortgage due to credit issues or other problems? Contact the FHA directly at 1-800 CALL FHA. Request a referral to a local, HUD-approved housing counselor who can assist you with planning, budgeting, and other important credit application issues ahead of any purchase or | more...

August 20, 2024

A Look At FHA Rehab Loans For Beginners

By Joe Wallace

If you want to save money on purchasing a home, buying one that requires improvements or renovations can be a wise financial decision. FHA Rehab loans can help whether you want a fixer-upper property that’s new to you, or you want to remodel your existing home. These government-backed mortgages, or 203(k) Rehabilitation loans, combine the home purchase cost and renovation expenses into a single mortgage. This program lets you buy a house that would not otherwise pass the appraisal process. The FHA offers two primary types of Rehab loans to cater to different project scales. The Standard 203(k) option suits major rehabilitation projects typically requiring structural repairs, additions, or extensive remodeling. The minimum repair cost for this option is $5,000, and a licensed contractor must complete the work. There is | more...

August 14, 2024

The Credit Check For FHA Cash-Out Refinances

By Bruce Reichstein

Is the credit check for an FHA cash-out refinance loan the same as for a new purchase home loan? Borrowers want to know how their credit will meet lender standards when applying for a refinance loan. Some make the same common mistakes in the months leading up to a refi loan application that others do when applying for a new purchase home loan. What can you do to increase your chances at refinance loan approval? Treat An FHA Cash-Out Refinance Loan The Same As Your Original Mortgage FHA cash-out refi loans require a new credit check and a new appraisal. The new appraisal ensures you are getting the value of your home that market values currently reflect. When rising property values may increase your potential cash out, the appraisal ensures | more...

August 13, 2024

FHA Refinance Options: No Cash Out

By Joe Wallace

FHA “no cash-out” refinance options can help first-time home buyers and experienced homeowners alike. If you need to explore your options to lower interest rates, shorten a loan term, or switch to a fixed-rate mortgage, consider the options discussed below. FHA No-Cash-Out Refinancing The FHA no-cash-out refinancing option is right when you want to modify the terms of your existing loan without getting cash at closing. Refinancing into a fixed-rate, no-cash-out FHA loan is suitable for many when interest rates are at or below the rates the borrower initially qualified for. Refinancing into a fixed-rate loan from an adjustable-rate mortgage can make for a more predictable loan, even if the rate isn’t as competitive as you might like. Having a rate that will not change or will not change again | more...

August 12, 2024

Reverse Mortgages: HECM and Non-FHA Options

By Joe Wallace

Reverse mortgages have become increasingly popular as a retirement financial planning tool. They give homeowners a way to access their home equity without having to make monthly payments, and that equity can come as a lump sum of cash or installment payments, or via a line of credit. Some disbursement options may be open to all applicants, others may depend on circumstnaces. When looking into reverse mortgage options, you will come across two main types: FHA reverse mortgages, also known as Home Equity Conversion Mortgages, and non-FHA reverse mortgage options offered by conventional lenders. The FHA HECM is a reverse mortgage with a government guarantee. That government backing provides the lender with some protection in the event of loan default, making it easier for the lender to approve the loan. | more...

August 1, 2024

Comparing Conventional Reverse Mortgages To FHA HECMs

By Joe Wallace

A reverse mortgage is a refinance option for homeowners 62 or older who want to tap into their home equity. These loans are designed for senior homeowners who own their homes outright or are close to doing so. There are FHA reverse mortgages and conventional equivalents. Some borrowers are right for a conventional option, while others should consider the FHA HECM. Traditional mortgages require monthly payments to a lender. In contrast, reverse mortgages allow senior homeowners to borrow money secured by the equity in their home. These loans offer cash back to the borrower in a variety of options, including a lump sum, monthly payments, or a line of credit. Typically, repayment is not required during the borrower’s lifetime unless the home is sold or no longer used as the | more...

July 30, 2024

FHA Refinance Loan Basics For New Borrowers

By Joe Wallace

An FHA refinance replaces your existing mortgage with a new one. It is sometimes used to obtain a loan with more favorable terms or get cash out at closing time but an FHA refi loan can also be done to exit a conventional loan or an adjustable-rate mortgage. Borrowers are commonly motivated to refinance to get a lower interest rate, to shorten their loan term, or tap into their home equity. The FHA offers several refinance programs tailored to different needs. Which one is right for you? FHA Rehabilitation Refinancing The FHA 203(k) rehab refinance loan program enables you to borrow extra funds for home renovations or repairs. This can help if you want to refinance and upgrade your home simultaneously. You can refinance a conventional loan or an existing FHA | more...