FHA Refinancing With a Cash-Out Loan
In order to get the most benefit from refinancing your mortgage, it is often best to consider refinancing after you have had time to build up a significant amount of equity in your home. If the property was purchased more than one year prior to the refinance, the homeowner can refinance the existing mortgage for up to 85 percent of the appraised value plus the allowable closing costs, which vary from state to state.
While economic news fluctuates back and forth between good and bad news, HUD and the FHA aren’t taking any chances with the current housing market. According to a 2009 memo from the Department of Housing and Urban Development, the FHA is changing the rules for FHA cash-out refinancing due in part to “…the continued deterioration in the housing market, and FHA’s need to limit its exposure to undue risk”.
How does a cash-out refinance work?
When refinancing, if a borrower elects to take “cash out” in addition to their existing loan, the new mortgage balance will be larger than the original. That’s right, it’s not free money, even though you get cash in hand!
Once the refinance is complete, the new loan will consist of the original balance prior to the refinance plus the desired cash-out amount. So expect both the size of your mortgage and your mortgage payment to increase in return for cold, hard cash.
How does a cash out refinance differ from a home equity loan?
- A home equity loan is a separate loan on top of your first mortgage.
- A cash-out refinance is a replacement of your first mortgage.
- The interest rates on a cash-out refinancing are usually, but not always, lower than the interest rate on a home equity loan.
- You pay closing costs when you refinance your mortgage.
- Generally, you don’t pay closing costs for a home equity loan.
- Closing costs can amount to hundreds or thousands of dollars.
We have the Best Loan Programs in Las Vegas for Refinance with No Origination and No Underwriting Fees.
You can also Refinance your home loan with us if you are Upside Down. We offer excellent Cash Out and Debt Consolidation Refinances with No Fees and Low Rates as well.
We Offer Competive Rates on all Refinance Programs! There are many benefits to refinancing the loan you currently have on your home.
With rates at historic lows this could be the perfect time to save money on your mortgage payments, or even pull out some cash built up in the equity of your home. Property values have increased 35% in Las Vegas in the past 12 months. So you might be able to refinance your home today even if you were turned down a year ago.
For Las Vegas mortgage rates and home refinance options contact us
We created our Refinance Advisor for us to better assist our client with their refinance needs.