December 7, 2017
FHA refinance loan options in 2018 include options for cash-out refi, FHA Streamline loans, and more. The right home loan refinance option for you depends on your financial needs and goals. What do you want to do with your FHA refinance loan?
Get A Lower Interest Rate, Monthly Mortgage Payment
If your goal is to reduce the amount of your mortgage payment every month, and you have an existing FHA home loan, the FHA Streamline Refinancing option is definitely for you. Streamline refinance loans are for existing FHA mortgages and generally require a lower interest rate and/or monthly payment as a condition of loan approval.
Basically, there must be some type of tangible benefit for an FHA Streamline Refinance loan-the lower payment or interest rate is one of those. But so is refinancing out of an adjustable rate mortgage (ARM) into a fixed-rate loan.
It is true that monthly payments may not go down in cases where the borrower is getting out of an ARM into a fixed-rate mortgage, but the predictability of mortgage payments on a fixed rate note is a definite benefit. However, borrowers should know that certain add-ons to an FHA Streamline refi may increase the mortgage payment.
If you are interested in exploring your refinance options with an FHA Energy Efficient Mortgage (FHA EEM), the lender will advise you on how those options may increase your loan amount.
Streamline loans have no FHA-required credit check or appraisal (the lender is free to require one or both of these) unless add-ons to the loan increase the mortgage payment over a certain threshold.
Get Cash Back On Your Refinance Loan Transaction
Borrowers who have equity in their homes and want to get cash back on a refinance loan transaction should discuss FHA cash-out refinancing with a participating lender.
These refi loan options in 2018 are open to those with mortgages of any kind, not just those with existing FHA mortgages. You can use FHA cash-out refinancing with a conventional mortgage, VA, and many others.
Cash-out refinance loans require a new credit check and appraisal. Borrowers should come to the refinance loan process with the same mindset as when they applied for their original mortgage; make sure you have 12 months of on-time payments on all financial obligations before applying and check your credit reports as early as possible to know what the lender will see when you apply.
There are also no-cash out refinance loan options for those with non-FHA mortgages. You don’t have to apply for a cash-out loan to refinance your existing non-FHA mortgage.
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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