FHA Loan Cash-Out Refinance Guidelines Changing – For the Worse!
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If you’re looking for the best cash-out refinance option available in today’s mortgage market, look no further than the FHA loan. At Quicken Loans we call it the FHA Express, and it offers easy and quick refinancing choices.
Cash-Out Refinance With an FHA Loan
The top benefit of refinancing with an FHA loan is the very generous cash-out amount that FHA loans offer. Right now, that amount is 95% of your home’s value, but it’s changing March 30, 2009. That’s bad news for anyone looking to get the most money out of their home for home improvements, debt consolidation or other great ways to smartly use home equity.
FHA Cash-Out Guidelines Changing March 30, 2009
In order to qualify for the most cash out of your home, you’ll need to act before March 30, 2009. FHA cash-out refinance limits of 95% of your home’s value are dropping to 85% after that. Here’s how this could affect you:
Let’s assume you have a home worth $200,000 and want to do a cash-out refinance. With today’s guidelines, valid until March 30, you could refinance 95% of your home’s value with an FHA cash-out refinance. In this example, that means a you could get a maximum dollar value $190,000.
However, after March 30, you’ll only be able to refinance 85% of your home's value with a cash-out FHA loan refinance. That would mean a maximum cash out of $170,000 on a $200,000 home.
In short, on a $200,000 home, the maximum cash out using an FHA loan is going down by $20,000 in just a few weeks. Act now if you are considering an FHA cash-out refinance.
Why Use FHA Express for a Cash-Out Refinance?
In the last few years, FHA loans have skyrocketed in popularity – both for refinancing and buying a home – due to the lighter restrictions and guidelines for qualifying and closing. Typically, FHA loans are easy to qualify for folks with lower credit scores. And they also offer the highest amount for both rate and term and cash-out refinancing. FHA still remains an excellent option for those looking to refinance or purchase, but the cash-out refinance limit is changing in a just two weeks. Now is the time for anyone considering a cash-out refinance to speak with a mortgage professional.
Act Now for an FHA Cash-Out Refinance Before It’s Too Late
To get the most money out of your home when doing a FHA cash-out refinance and to take advantage of the 95% FHA cash-out limit, get in touch with a mortgage banker before FHA guidelines change on March 30, 2009. After that, you’ll only be able to get 85% of your home’s value with a cash-out refinance. The difference may be a costly one for you if you can’t pay down higher interest debt or finance your home improvement project at a low fixed rate.
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