January 2, 2024
Many expect home loan rates to start falling in 2024. Some potential FHA loan applicants want to know what kinds of refinance opportunities wait for them as the housing market recovery gets underway, however slowly. We explore some of the options below.
FHA Refinance Loan Options
You have multiple choices when it comes to FHA single-family home loan refinance options.
They include FHA cash-out refinancing, FHA streamlines refinance loans, and no-cash-out FHA refinances loans.
You can refinance an existing property with an FHA 203(k) rehab loan that lets you refinance and renovate simultaneously as an alternative option.
Streamline Refinance Loan Option In Early 2024
Mortgage loan interest rates are too high at press time to consider using an FHA streamline refinance option. FHA streamline refi loans are for those who want to apply for a refinance with no cash back, no FHA-required credit check, and no FHA-required appraisal.
Streamline refinance loans must typically result in a benefit to the borrower. A lower mortgage rate is one of the preferred benefits and that option simply isn’t on the table in early 2024. That’s not to say that improvements won’t come eventually. That said?
At press time, mortgage loan rates are too high to make streamline refinance loans an option, especially for those who got their FHA loan case numbers when rates were still low.
FHA Cash Out Refinance Loans
Cash-out refi options are worth considering when you have a primary goal of getting into a lower interest rate or a lower monthly payment and can’t choose a streamlined refinance. Do you have a specific goal for your cash-out funds? These loans may serve you best when you know exactly what to do with the money and when.
203(k) Rehab Refinance Loan Options
If you have a renovation project an FHA rehab loan called the FHA 203(k) rehabilitation refinance loan can help. These are FHA refinances for your existing mortgage that you can use to rehab your house.
The work for the project must have lender approval, and it must also satisfy FHA requirements in terms of scope of work and scale.
Some find the 203(k) option preferable and have no issues working within the guidelines of the program.
But others choose cash-out refinance loan options over FHA rehab loans because the improvements they want may not be approved under the FHA rehab loan program. It’s something to consider as you weigh your options.
