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Government Mortgage Refinancing
Government refinance loans continue to be a great resource for homeowners who want to put their equity to work for them. Whether you are refinancing an ARM (adjustable rate mortgage) for a better fixed rate, consolidating a fixed-rate home loan and a home equity line of credit into a single loan, or simply need cash, a Federal Housing Authority (FHA) cash out refinance may be right for you.
You may qualify for an FHA cash out refinance if you have owned and lived in your home for more than a year, have accrued some equity, and have a good payment history on your current mortgage. |
Nationwide Mortgage Loans offers government mortgage refinancing with FHA and VA home loans. |
An FHA loan may allow you to refinance your current mortgage for more than you owe in order to withdraw your home's equity. If you put money down on your home, or if home prices in your area have risen since you bought your house, you have equity. An FHA home refinancing loan allows you to tap that equity by borrowing up to 85% of your home's appraised value, plus closing costs. The loan is considered "cash out" refinancing when you leave the closing table with more than $2,000 in your pocket as a result of the higher loan amount.
Generally, it's easier to qualify for an FHA loan than for conventional fixed rate home loans. While your mortgage payment history must be good, FHA loans do not require you to have a minimum credit score. That means if you've had previous credit problems, you may still qualify as long as you've consistently paid your current mortgage on time.
Government Mortgage Refinancing with FHA |
 FHA Home Mortgages offer 30-year fixed interest rate terms.
The FHA offers great loans for homeowners looking to refinance. FHA refinancing is provided up to 97% rate and term or 95% for refinancing terms with cash out. (fico scores are not a factor, but mortgage history is critical)
The FHA Secure mortgage was introduced in 2007 to help troubled borrowers get back on course. Many borrowers are suffering with adjusting mortgage rates and many of them were unable to qualify for refinancing until the FHA Secure was released. The FHA Secure offers homeowners another chance to refinance into an affordable fixed rate loan.
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| Also see options for FHA Streamline Refinance , FHA Home Loans and FHA Secure Refinancing. |
You can also cash out refinance after major credit issues much sooner than with a conventional mortgage, typically 2 years after a bankruptcy and 3 years after a foreclosure. You'll qualify for a loan based on your gross income - before taxes - and how much of your total income you can afford to spend on housing.
To calculate how much cash you should get from a FHA cash out refinance, multiply the property value by 85% to determine the new maximum loan amount. Then subtract the amount you still owe on your current mortgage from the new loan amount to determine your approximate cash out amount.
Once you have the cash in hand, it can be used for anything, from bill consolidation to home improvements, making investments to funding education and vacations.
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