July 23, 2018
You might not be thinking about an FHA refinance loan today. Or tomorrow.
But eventually the idea of refinancing your mortgage will become an option worth examining whether it’s because housing market conditions have increased your property values and you want to take value out of your home in cash, or getting into a lower mortgage payment, or even to get out of an adjustable rate loan and into an FHA fixed rate mortgage.
When it’s time to refinance your mortgage, it’s important to ask yourself some important questions. The answers will tell you a lot about what kind of refinance loan to pursue.
Do You Want Cash Back On Your FHA Refinance Loan?
If taking cash back on your refinance loan is a priority, the FHA Cash-Out refinance option is the one you should explore.
Cash-out refinancing can be used on any type of mortgage whether it’s an existing FHA loan or not. The amount of cash back on the deal will depend on how much value your home has-an appraisal will be required to determine this. Your cash back will also be after the expenses of the loan are paid and the original mortgage has been paid off.
The remaining funds after those calculations are made can go to the borrower in cash for any purpose.
Do You Want To Remodel Your Home With An FHA Rehab Loan?
FHA 203(k) rehab loans are for those who want to buy or refinance a home and rehab or remodel it at the same time. You don’t have to apply for a huge FHA rehab loan-there is a Limited 203(k) that provides a smaller amount of money for approved repair or remodeling work.
The limited 203(k) doesn’t permit major structural work but you can do a lot of cosmetic changes with a Limited 203(k).
Do You Want To Get Out Of An Adjustable Rate Mortgage?
If you have an adjustable rate mortgage, it’s possible to get an FHA refinance loan to put you into a fixed rate mortgage.
For existing FHA mortgages this can be done with an FHA Streamline Refinance loan which must result in a lower interest rate, lower mortgage payment, or some other benefit to the borrower including moving into a fixed-rate mortgage and out of the adjustable rate.
For non-FHA mortgages you can refinance using a cash-out refi or a no cash-out FHA refinance loan. FHA Streamline Refinance loans are only for existing mortgages, but a cash-out or no cash-out refi can accomplish the same goal of leaving the adjustable rate loan behind.
Talk to a loan officer about these options and more that are available as FHA refinance loans. Lender standards including FICO score requirements, age of the home loan to be refinanced, and other factors will apply.
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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