Home Improvements? Try FHA Cash Out Refinance
Home improvements or other major expenses? Try FHA cash out refinance and let the equity in your home work for you.
If are you a homeowner dreaming of a chef’s kitchen, complete with granite countertops, a statement backsplash, new custom cabinets, and an upgraded gas range, then this article is for you. Want to remodel your master bathroom, or need to complete a major home improvement project such as replace the siding on your house? The FHA cash out refinance is a good solution.
Finding the cash for these major types of projects, for most homeowners is difficult, but there is an easy option to use: the home equity in your house – that is, the amount of your house’s value that you have paid down and own. You can refinance your mortgage and do what’s called a cash-out refinance (or cash-out refi, as those in the mortgage industry, call it) to get quick access to your home equity so you can pay for important home improvement projects.
What is FHA Cash Out Refinance?
A cash-out refi is when you modify your mortgage and receive a check for the agreed-upon home equity amount in your house so you can use it for important projects or financial obligations.
The process includes:
- Finding a lender for refinancing your mortgage (this doesn’t have to be the same lender that currently owns your mortgage).
- Undergoing a credit check and submitting important financial documentation. This includes documentation that proves your annual income and your current mortgage information.
- Having your home’s value professionally appraised so that your new mortgage lender can determine its value. Your home equity amount will be calculated by taking the newly appraised value, minus what you currently owe on your house.
Once you’re approved, you’ll lock in a new interest rate for your newly refinanced home mortgage.
Does a Cash-Out Refi Mean My Mortgage Payment Will Go Up?
Refinancing your mortgage for home improvements doesn’t necessarily mean your monthly mortgage payments will go up. Your mortgage payment may actually go down in a variety of scenarios, including IF:
- Interest rates are lower than when you originally purchased your home.
- Your current credit score qualifies you for a lower mortgage interest rate.
- Through refinancing, you’re able to drop monthly private mortgage insurance (PMI) payments.
(To use a cash out refi calc or get a free consultation, visit FHA Loan Search.)
Get a Quote Now for Refinancing Your Mortgage for Home Improvement Projects
We can help you get a quick quote for refinancing your mortgage for a cash-out refi. Click here to get the process started.