September 3, 2015
Borrowers who want to refinance may wonder which FHA refinance loans offer no credit check or new appraisal. Are such loans possible? The answer may depend on your lender and other factors, but let’s see what options are open:
For starters, non-FHA loans refinanced under the FHA single family home loan program will always require a new appraisal and credit check. This is because the only refinance option for non-FHA mortgages (aside from reverse mortgages offered under the FHA program, which also require new appraisals and credit documentation) is the cash-out refinance option or the no-cash-out equivalent.
Which leaves only FHA-to-FHA Interest Rate Reduction Refinance loans (IRRRLs) with a possible option to apply with no credit check or appraisal. But there’s a caveat with these loans–the FHA loan program does not require credit checks or appraisals, except under certain circumstances and the lender is free to require one or both.And that is perfectly acceptable to the FHA.
Borrowers will be required to pay any associated fees for appraisals, credit reports, etc. with FHA refinance loans. Borrowers may not be charged more than the services actually cost to be rendered–the actual amount of the appraisal fee and credit report fees should be passed on to the borrower.
FHA loan rules do require a new appraisal and/or credit check when certain conditions apply to the new loan.
Borrowers may choose add-ons to their FHA IRRRL such as the FHA Energy Efficient Mortgage. If the amount of the monthly payment increases by more than 20%, the lender may be required to qualify the borrower.Borrowers who want FHA IRRRLs should know that cash back on the transaction is generally not permitted in excess of $500 except in the form of refunds for money paid up front.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
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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