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The kind of FHA refinance loan you get will depend on what your financial needs and goals are; some borrowers want cash back, others need a lower mortgage payment, and some just want to get out of an adjustable rate mortgage into the predictability of a fixed-rate FHA mortgage.

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Comparing FHA Refinance Loan Options

Comparing FHA Refinance Loan Options
October 25, 2018 - The kind of FHA refinance loan you get will depend on what your financial needs and goals are; some borrowers want cash back, others need a lower mortgage payment, and some just want to get out of an adjustable rate mortgage into the predictability of a fixed-rate FHA mortgage.
Do you know what your FHA loan options are?

FHA Loans for Cash Back to the Borrower

The FHA Cash-Out Refinance loan is what you need to refinance your mortgage and get cash back as part of that transaction. Cash out refi loans, especially FHA cash-out loans with their comparatively lower interest rates (for qualified borrowers) and rising property values can be an important option to consider.

But especially in recent times; a TransUnion report notes that with a national housing market with more than 14 trillion dollars in home equity more consumers are thinking about cash-out refi loans.

You may have noticed headlines in the last months of 2018 about interest rates going up. The TransUnion report mentioned above also points out that in times of rising interest, more borrowers tend to stay in their homes rather than sell and buy again.

Staying in the home brings a renewed interest in cash-out refinance loans. This is true for a variety of reasons including rising consumer debt which some seek to consolidate using an FHA cash-out refinance.

Which FHA Refinance Loans Allow Cash Back?

FHA cash-out refinance loans and FHA reverse mortgages both permit cash back to the borrower. FHA reverse mortgages are for qualified borrowers aged 62 and older who either own their houses outright or are close to paying the mortgage off on the home.

Both loans allow cash back to the borrower but do require certain closing costs and other expenses be paid up front or included in the mortgage amount (where permitted). The cash back to the borrower is affected by these costs as well as how much money it takes to pay off the original mortgage.

The longer you have been making mortgage payments, the less money will be required to pay off that note, resulting in potentially more cash back to you.

FHA Streamline Refinance loans, Rate-and-Term Refinances, Simple Refinances, and refinances meant to avoid foreclosure do not feature cash back to the borrower except for legitimate refunds and generally funds in excess of $500 back to the borrower require additional scrutiny to insure that is not a violation of the no-cash-back rules for these types of refinance loans guaranteed by the FHA.

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