With California home values currently being at historically high values, many homeowners have seen their home values increase nicely since they purchased their home. If you have an FHA home loan then you already know they are a little different from conventional loans.
The same is true for FHA refinancing loans, especially when you want to take cash out from the new loan. When you are getting cash out from any home loan you are paying off your current loan and getting a new loan that is greater than your current loan. Typically you are using the extra money to invest in home renovations or pay off higher interest debt, like credit cards.
With FHA loans, the maximum Loan-To-Value allowed for cash out refinancing is 80%. For example, if your home is worth $500,000 the maximum cash out refinance loan you could receive is $400,000. If your current loan balance is $350,000 then the most cash out you could take in this example is $50,000.
Some of the other factors considered by FHA lenders include:
- Credit Scores – Your lender will need to run a current credit report.
- Your Debt-To-Income Ratio – Your lender will need to get this information and documentation from you. (how much money you earn monthly versus how much you spend)
- Payment History – FHA requires that you have had your current loan for a minimum of 6 months before you refinance.
- Uses for Your FHA Loan – Currently FHA has no restrictions on how you use your cash out funds.
If you are thinking about getting any type of home loan, make sure you don’t take on any additional debts (new credit cards, new car loans, new student loans, etc..).
At Integrated Lending Group we can help you get the best California FHA Refinance or California FHA Purchase Loan for your situation. Reach out to us today and find out why we consistently receive 5 Star Reviews from our clients!