by mary hodder
Question by C o n f u c i a n: How does a refinancing loan work on an FHA mortgage?
I have an FHA loan for $ 25,000……House is worth much more, especially after the repairs we did. House sold at least 3 different times between 1995 and 2006 for approximately $ 100,000.
I am guessing it is at least appraised for $ 65,000 right now….
I still have 29 years left on the mortgage. How does refinancing work (what kind of loan would I get in $ terms), and what do I need to get approved?
Answer by loanmasterone
The equity you might have accumulated in the property would depend on if you are able to apply for and be approved for a refinance on your home.
Primarily you would go through the same process as you did when you first purchased your home. You would have to find a FHA mortgage lender and apply for a refinance of your property through.
You might inquire of this FHA mortgage lender about the FHA streamline refinance program. You would still get your refinance, however, there is less paperwork and perhaps an appraisal report might not be required.
Normally on a refinance you would able to refinance for a maximum of 80% of the appraised value of the property. If you think the property would be valued at $ 65,000 then 80% would be approximately $ 52,000. After paying off your current mortgage you would see approximately $ 27,000 in your hand minus points and fees that would be charged for the mortgage loan refinance.
There might be a provision that would not allow you to cash out for more than you paid for the house a year ago. You might be able to pay off any consumer or credit card through this refinance or you might be able to purchase a large ticket item for you house.
Ask the mortgage loan officer for cash out requirements that might apply for your refinance and see if there are any restrictions.
I hope this has been of some benefit to you, good luck.
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