If you’re a homeowner considering refinancing your properties, you may qualify for one of three FHA insured refinance transactions. It could be an FHA streamlined refinance loan, or a cash-out refinance loan, or a no-cash refinance loan. According to FHA loan rules, if you’re applying for a new mortgage, you have to meet the following criteria: do not be the same party as the original loan, and do not reside on the same property listed in the refinance application.
- Cash-Out Refinance Loan
Some homeowners may qualify for the cash-out refinance loan. This option offers individuals the chance to get the most benefit from a second mortgage, making this an ideal option for homeowners wanting to change monthly payments after equity has already increased in a home. If you’re looking for a loan that is worth more than the total sum of the current mortgage, you can apply property collateral to the request.
- No Cash-Out Refinance Loan
Another option is the FHA no cash-out refinance loan. This loan can be applied to an existing FHA mortgage, but in order to be considered, an appraisal is required, according to rules created by the United States Department of Housing and Urban Development.
- Streamlined Refinance Loan
There’s also the streamlined refinance loan, which is made with or without an appraisal. This option lets the borrower decrease the interest rate on an existing property loan. In order to qualify for this transaction, you need a current FHA loan that is in good standing. Additionally, the requested refinancing has to cause a lower monthly interest payment.
Takeaway
Applying for an FHA loan is a smart move, but before committing to the idea, figuring out qualifications is crucial.
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