FHA Refinance Options
If you are currently have a FHA loan, you have many refinance options. The range of options will be determined by your Credit Score and the amount of Equity you have in the property. The Better your credit and the Higher the property Value, the better options you will have!
FHA Cash-Out Refinance:
One popular option is to stick with the FHA on a refinance due to the easier qualifying standards. Debt consolidation, cash out and lowering your monthly payments are all common reasons that people choose this option. FHA allows up to 85% of the value of your home as cash-out. Due to higher home prices in many areas, this will give you access to the equity in your home.
Once your property achieves 10% equity you are "in the game" to start looking at conventional financing. There are 3 ways that you can do this and all are very good options depending upon your goals.
FHA Rate-And-Term Refinance Loans:
A Rate-And-Term refinance refers to a no cash-out refinance where all the proceeds are used to pay existing liens and the property and costs associated with the transaction.
Like simple refinance loans, Rate and Term refinance loans is also no cash back to the borrower and a credit check and appraisal are required.
Borrowers should treats these refinances the same way they did for their original mortgage because the same requirements apply in order to refinance.
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