December 4, 2018
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 a certain point to prevent a recession or public perception that one is coming.
That’s one reason to shop around for an FHA lender-getting the best rates you can is always important, but especially after a recent rising trend.
FHA Cash-Out Refinance Loans Will Require A Credit Check
Any transaction with money back to the borrower will require a new credit check whether it’s a cash-out refi, an FHA reverse mortgage, etc. You should treat the holiday spending season with caution ahead of your new loan application. Your FHA lender will want to know that your debt ratio is within certain limits, and it’s best not to open new credit card accounts ahead of your new loan.
Cash-Out Refinancing Is Appraisal Required
If you have been putting off a home improvement or two ahead of your refinance loan, it may be wise to see what you can afford to get accomplished before your appraisal. Any chance to increase the value of your home with certain types of improvements will be a good thing, but for those who need to repair an essential feature of the home, getting that work done sooner rather than later may be very helpful.
Cash-Out Refinance Loans As A Way To Drop Someone From Your Mortgage
At least one of the original borrowers must be on the new note to refinance, but you can add or remove a co-borrower with an FHA refinance loan.
Refinance A Paid-Off Home
Some home owners want to know if they can refinance their home even though the original mortgage is paid off. While lender requirements may vary, you will find the following section of the FHA home loan rule book, HUD 4000.1, to be very helpful:
“A Cash-Out Refinance is a refinance of any Mortgage or a withdrawal of equity where no Mortgage currently exists, in which the mortgage proceeds are not limited to specific purposes.”
Ask your lender if that financial institution will underwrite a cash-out refinance loan for a paid-off home.
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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