Articles in Category: Cash-Out Refinance

November 13, 2023

Loan Options For Remodeling Your Home

In the last quarter of 2023, mortgage rates and high house prices are negatively affecting the home improvement industry. That may lead to higher costs associated with remodeling your home. Bloomberg published an article in late 2023 noting that home improvement spending hit major highs during the pandemic; Lowes, Home Depot, and other brands may have earned more from these endeavors during lockdown, but the numbers may be telling a different story post-pandemic. And prices are going up. When remodeling costs rise, some borrowers only scale back their plans to the most needed repairs. But even with a less ambitious plan, funding is still needed, especially with Lowes and Home Depot prices creeping higher for raw materials and tools. Fortunately, there are FHA home loan options that can help. Home | more...

October 20, 2023

FHA Refinance Loans For Home Improvements

By Bruce Reichstein

FHA refinance loan options include the ability to apply for a refi loan to do home improvements–a very important option for those with existing FHA mortgages or non-FHA loans alike. That said, home loan interest rates are higher than they’ve been in a while at publication time and many think refinancing today isn’t a great option. But what about when interest rates and the economy in general begin to improve? You may not be considering a refinance loan today, but when mortgage rates begin to fall, the option becomes more viable for many. How can FHA refinance loans help a borrower make upgrades or improvements when the time is right? There’s more than one way to approach the refinance loan question if you want a refi AND funds to perform | more...

July 18, 2023

FHA Refinance Loan Myths

By Joe Wallace

FHA refinance loan myths keep some potential borrowers from making a truly informed choice about what to do when applying for a cash-out refinance loan, reverse mortgage, or rehab loan. Know the facts before you decide! FHA Refinance Loans And Changing Lenders It’s a myth that you can’t refinance your home with a different financial institution than what you started with. You are not required to use your original lender when refinancing a mortgage loan. This is true regardless of whether your original mortgage is an FHA loan. Your original mortgage can be refinanced into an FHA loan, even if it is a conventional mortgage or other type of non-FHA loan. You may need to change lenders if your current mortgage is a non-FHA loan and your lender does not | more...

July 17, 2023

How To Get Cash Out Of Your Home

By Joe Wallace

When you buy a house with an FHA loan, you start building equity with your 3.5% down payment. Once you begin making FHA loan mortgage payments, you continue to build equity in your property over the lifetime of the mortgage. But how do you take equity out of your home? We explore some important options below. Home Equity Loans And Home Equity Lines Of Credit The FHA does not offer a home equity line of credit, this is an option available from many conventional lenders and offers you a line of credit using your house as the collateral. The closest an FHA mortgage gets to a home equity loan is the FHA Cash-Out Refinance loan, which does tap into the unused equity in your house. FHA Cash-Out Refinance Loans FHA | more...

February 8, 2023

Home Renovation With An FHA Loan

By Joe Wallace

There are two kinds of home renovation projects; the ones you plan and the unexpected renovation you may need to do if there is a sudden problem in the home after purchasing it. An unexpected home renovation can be caused by many things that were not a factor at the time your home inspection was done; a water pipe can burst, a stove can prematurely stop working, or storm damage could cause a leak in your roof. Repair experts and contractors will be quick to point out that even a home that passes an inspection can develop such problems through no fault of the builder or seller. An unexpected home repair situation isn’t uncommon for home owners, so what’s a borrower to do when the need arises? You can fund | more...

October 24, 2022

Is There An FHA Home Equity Loan?

By Joe Wallace

A home equity loan is one using the equity in your home for the loan’s collateral. What is equity? It’s defined as the current value of the property minus what you still owe on the existing mortgage loan. Does the FHA offer a home equity loan? On paper, the FHA does offer a loan that allows you to get cash back at closing time like a home equity loan but the two aren’t really the same thing. Here’s why. For a home equity loan a borrower typically gets loan funds in a lump sum with a fixed interest rate, similar to an FHA Cash-Out Refinance. Borrowers who default on a home equity loan may face foreclosure the same as a cash-out loan. And both loans have other things in common–especially | more...

August 12, 2022

Refinancing a Conventional Loan To An FHA Mortgage

By Joe Wallace

Some borrowers want to know: is it possible to refinance out of a conventional mortgage using an FHA refinance loan? It’s a smart question to ask, especially if you are interested in moving out of an adjustable-rate mortgage and into the predictability of a fixed-rate loan. FHA Refinance Loan Options FHA loan rules do permit you to refinance a conventional mortgage using an FHA cash-out refinance loan. But that’s not your only option. The FHA loan handbook, HUD 4000.1, says your options for FHA refinancing include non-FHA to FHA transactions. What kinds of refinance loan options are available? In general: Cash-out refinances to help you pull equity out of your home; No cash-out refinances for both FHA and non-FHA-insured Mortgages. These loan options include Rate and Term refinance, and FHA | more...

FHA Home Loans And The Biggest Credit Mistake You Can Make

July 7, 2022

FHA Cash-Out Refinance Loan Rules You Should Know

By Bruce Reichstein

What should borrowers know about FHA cash-out refinance loans? There are many areas, but some of the most important include how you can use the proceeds of a cash-out refinance loan, and the rules the lender is required to follow when verifying the borrower is eligible for a cash-out loan. Borrowers may wish to pay off credit card debt with an FHA Cash-Out refinance loan, or use the money to pay off nuisance debt, buy a car, go on vacation, etc. What are the rules for FHA cash-out refinance loans and the money back to the borrower? How To Use FHA Cash-Out Refinance Loan Proceeds Did you know that some FHA loans have specific guidelines as to how the loan funds may be used? For example, if you applied for | more...

June 30, 2022

FHA Home Equity Loans?

By Joe Wallace

Is there such a thing as an FHA home equity loan? Some borrowers want to tap into the equity built up in their home to pay bills or to make a large purchase, others may want to start home improvement projects. Conventional mortgages often come with the option of applying for a home equity loan or a home equity line of credit. What options exist for FHA borrowers? FHA home loan options don’t include a home equity line of credit or a home equity loan. You won’t find an FHA loan option that mimics these options. What FHA borrowers do have the option to apply for? FHA Cash-Out Refinancing, which allows you to take cash back at closing time if you meet the following requirements in addition to credit qualifications: | more...

May 6, 2022

FHA Refinance Loans: What You Should Know

By Bruce Reichstein

If you are considering your FHA refinance loan options, there are several things you should know about refinancing with FHA before you apply. There are a variety of refinance loan options available-under FHA loan rules you can apply to refinance a home loan with cash out, you can also apply for an FHA Streamline Refinance that has no cash back to the borrower but also has no FHA-required credit check. Your participating lender is permitted to require an appraisal and/or credit check depending on lender standards and other variables. Borrowers in conventional loans or other non-FHA mortgage loans can refinance using the FHA Cash-Out Refinance option or choose an FHA refinance (with required credit check and appraisal) in the no-cash-out version of this type of FHA refinancing. FHA Streamline refi | more...