Cash Out Refinance

FHA mortgages allow cash out mortgage refinances of owner occupied properties only. The maximum cash out refinance mortgage loan cannot exceed 95% of the loan to value. The new FHA loan must not exceed the maximum FHA loan limit for the county of the subject property.

A cash out mortgage refinance is when a homeowner receives more than $2,000 back after closing or if the proceeds from the new FHA loan will be paying off a 2nd mortgage or HELOC that is less than 12 months old. Any HELOCs with a draw made in the last 12 months is also considered to be cashout.

The new FHA loan must be the primary lien holder on the subject property. You’re not required to have an existing FHA loan on the property to take advantage of this program. This programs allows you to take out up to 95% of the appraised value versus conventional loans which only allow up to 90% for cashouts. Also, FHA mortgage rates are much lower than subprime mortgages, and the PMI can be significantly lower.

HUD allows FHA Bankruptcy Buyouts, and is subject to the trustee’s approval. A 12 month history with no late payments is required for underwriting approval on all Bankruptcy buyouts. This program can help you buyout your remaining balance on your Chapter 13 bankruptcy, and may offer a much lower rate then your current mortgage. The borrower is required to have enough equity in the home to payoff the existing mortgage, and to payoff the bankruptcy balance.

FHA refinances can also be used to lower the PMI payments, and to help take cash out at the same time. FHA monthly mortgage insurance payments are much lower than your normal Subrpime PMI payments. All debts can be consolidated to one low monthly mortgage payment.