Articles in Category: Cash-Out Refinance

August 6, 2019

HUD Announces Important Change To FHA Cash-Out Refinance Loan Program

The Department of Housing and Urban Development has issued a mortgagee letter announcing a major change to the FHA Cash-Out Refinance Loan program. Effective September 1, 2019, the loan-to-value ratio for FHA cash-out loans is reduced from 85% to 80%. All FHA cash-out refi loans with FHA case numbers issued on or after 1 September 2019 will have the lower LTV. This has the effect of reducing the amount of cash back to the borrower on the transaction. The HUD press release states that the reduction is intended to protect against weaknesses in the housing market, and cash-out refinance loan defaults. The FHA has experienced an overall increase in cash-out loans as high as 250 percent according to HUD. In light of that statistic and other data, the FHA concluded | more...

July 9, 2019

Can I Do An FHA Cash-Out Refinance On A Rental Property?

By Bruce Reichstein

When you buy a home with a mortgage loan, you generally have the option later down the line to apply for cash-out refinancing on that home. It doesn’t matter if you have a conventional mortgage, VA loan, or an FHA home loan, cash-out refinance options are available once you have made a minimum amount of mortgage loan payments (not ideal) and the cash-out options only get better the longer you pay on the original mortgage. Why is cash-out refinancing not such a great deal in the earliest days of your mortgage? Partially because you haven’t paid down the loan enough and/or waited for your property values to increase long enough in the right circumstances to get much value out of the property. Generally speaking, the longer you pay on the | more...

June 28, 2019

FHA Home Loan Rules For Refinance Loans

By Bruce Reichstein

When headlines about home loan interest rates start appearing with the terms “new lows” or “lowest in months”, the minds of many home owners turn to refinancing. It’s very tempting to explore refinance loan options when rates begin falling; saving more money over the lifetime of the refinance loan is appealing and some borrowers feel they didn’t shop around aggressively enough for a better interest rate the first time around. When you are getting ready to refinance, what do you need to keep in mind in terms of FHA refi loan rules? Here are some areas to ponder. Basic Refinance Loan Transactions FHA refi loans come in a few basic types according to the FHA Lender’s Handbook, HUD 4000.1: Cash-out refinances: designed to pull equity out of the Property. No | more...

June 18, 2019

Why Do People Use Cash-Out Refinancing?

By Joe Wallace

There are many reasons why people want to convert the value of their home to cash. Some people use FHA cash-out refinancing to pay off credit cards or help lower student loan debt, others have needs they want to meet around the house whether its’ home improvement in general, building a rec room, or replacing old appliances. But whatever your cash-out refinance loan needs, there are some important issues to consider that may help you decide whether FHA cash-out refi options are right for your plans. Why do we say this? Because some people choose to pay for their home improvement projects or other expenses using a cash-out refi loan while others consider using a credit card to pay for them instead. What’s the best choice? In many cases the | more...

June 10, 2019

FHA Cash Out Refinancing Advice

By Joe Wallace

What do home owners need to know about FHA cash-out refinancing? There are a number of questions to ask yourself before you commit. Refinancing can be a big financial help for a home owner but getting the right loan for your needs is half the battle. Ask Yourself If You Need Cash-Out Refinancing And Why A cash out refinance loan can help you thanks to the cash back on the transaction, but is cash back really what you need? If your real goal is to improve the home, for example, you can apply for a different type of refinancing that could provide more money for those improvements than a cash-out refi loan could. An FHA 203(k) rehab loan is perfect for those who need to do home improvement projects and | more...

May 29, 2019

FHA Refinance Loans: Questions To Ask

By Joe Wallace

Are you ready for a refinance loan? Maybe you seek a lower interest rate, or maybe you want to get cash back on the transaction? Whatever your motivation for applying for an FHA refinance loan, there are some important questions to ask yourself-the answers will help determine your readiness for the new loan. Have I Checked My credit Score and History Lately? All consumers are entitled to a free credit report, which you should review long before attempting a mortgage refinance. If you find any evidence of identity theft, outdated or erroneous information, you will need time to contest that problem. Contesting your credit report could involve (in the case of identity theft and related issues) filing police reports, working with investigators, etc. Do not waste your time paying for | more...

April 11, 2019

First-Time Refinance Advice

By Bruce Reichstein

Buying your first home with an FHA loan means, for some borrowers, the need to think about a first-time refinance later down the line. What do first-time home owners need to know about refinance loans and their FHA loan options? Decide Ahead Of Time On Your Goals For The Refinance Loan FHA refinance loans can help you do a number of things depending on the need for the loan. For example, you may wish to do repairs or upgrades in the home, and for that purpose an FHA 203(k) rehabilitation loan is an excellent option to pursue. Rehab loans allow you to simultaneously refinance and repair or upgrade the house with approved projects, but if you are looking for cash back to use in any way you see fit, the | more...

February 27, 2019

FHA Refinance Loans For Non-FHA Mortgages

By Bruce Reichstein

Did you buy your first home with the help of a real estate agent but without the benefit of an FHA mortgage? When you compare online mortgage rates you will notice that the websites publishing these interest rates listing FHA loans with mortgage interest rates than conventional equivalents. While it’s true that your FICO scores and other financial qualifications will play an important part in the rate you are offered, when it’s time to refinance you may find an advantage with FHA mortgages, and not just in the interest rate department. FHA Refinance Loans For Non-FHA Mortgages The FHA refinance loan options a non-FHA borrower has include cash-out refinancing, the equivalent of such a loan but with no cash back, and FHA rehabilitation mortgages known as FHA 203(k) rehab refinance | more...

January 25, 2019

Refinancing Your Home Loan With An FHA Mortgage

By Joe Wallace

With recent interest rate headlines, some may be interested in refinancing their first home loan in 2019, especially those in adjustable rate mortgages who want to lock in an interest rate to avoid future mortgage loan rate fluctuations. Some will ask how much of the credit-check process is needed for an FHA refinance loan compared to when the original mortgage was applied for, and much depends on the type of refinance loan being applied for. Some refinance loans, such as FHA Streamline Refinancing, also known as an FHA Interest Rate Reduction Refinance Loans (VA IRRRL) do not feature a government-mandated credit check. Qualified borrowers will use the original credit check and other information used on the first mortgage as a guide. Your participating FHA lender is, however, free to require | more...

FHA Home Loans: Things To Do, Things Not To Do

December 4, 2018

FHA Cash Out Refinance In 2019

By Joe Wallace

There are many uses for an FHA cash-out refinance loan in 2019. Are you considering paying down student loan debt? Taking equity out of your home in cash for use to to home improvements, or to make a down payment on a new vehicle? FHA loan rules don’t restrict how you can use the funds from your cash out loan. FHA Cash-Out Refinance Loans In 2019 Some borrowers may be concerned about the rising home loan interest rates of 2018, but interest rate trends go in cycles and some mortgage experts are looking to the new year for some corrections or a slowing of interest rates going up based on the notion that further increases might damage consumer confidence. That would encourage the Fed to avoid more rate hikes at | more...