FHA cash-out refinance benefits & guidelines
An FHA cash-out refinance could help you access your home’s value to make home improvements, consolidating debt or pay other important expenses. Backed by the Federal Housing Administration (FHA), the FHA cash-out refinance has flexible qualifying criteria, which makes it accessible even if your credit is not perfect.
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Why choose an FHA cash-out Refinance?
While there are many refinance options, an FHA cash-out refinance could be an excellent choice for homeowners who want to tap into their home’s equity for needed funds but may not qualify for a conventional cash-out refinance.
FHA cash-out refinance guidelines
To qualify for an FHA cash-out refinance, you will need:
- Minimum credit score of 500 for debt consolidation
- Refinance to 80% of home value
- Home must be primary residence
For most other cash-out refinances, credit score requirements may vary. Your loan amount can be up to 80% of your home’s value if you’ve owned it for more than a year. And you’ll need a solid history in the home, with it being your primary residence, no late mortgage payments over the past 12 months and at least six consecutive months of payments.
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How to apply for an FHA cash-out refinance
Applying for an FHA cash-out refinance is simple with Rate’s Digital Mortgage. Follow these steps.
1. Contact an FHA-approved lender
Reach out to one of Rate’s FHA-approved loan officers.
1. Contact an FHA-approved lender
Reach out to one of Rate’s FHA-approved loan officers.
2. Gather key documents
You’ll need to provide income verification, tax returns, asset statements and personal identification.
3. Apply online
Once you submit your application, your Loan Officer will help you from there.
4. Close and celebrate
Once approved, you’ll be asked to sign closing papers and pay any closing costs for the FHA cash-out refinance. Upon completion, you can accept the bulk payment derived from the cash-out segment of the refinancing process.
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Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.
Rate is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.
Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Rate for more information
*Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Rate, Inc. for current rates. Restrictions apply.
Sources:
https://www.hud.gov/sites/documents/FY16_SFHB_MOD6_PROGRAM.PDF
*https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fha
*https://www.consumerfinance.gov/about-us/blog/credit-card-interest-rate-margins-at-all-time-high/
*https://www.nerdwallet.com/article/loans/personal-loans/average-personal-loan-rates