The most important factor in a cash-out refinance is the loan-to-value ratio of the borrower’s residence. This is an equation that compares the amount of the loan to the appraised value of the home. In order to determine the LTV ratio, the lender adds up all of the debt on the home , typically a first and second mortgage.
The government agency will insure three types of refinances: streamline, no cash-out (rate and term) and cash-out refinance. fha offers a limited-time refinance option for struggling homeowners owing more on their home than it is worth. The FHA short refinance option begins September 2010 and is scheduled to end December 31, 2012.
Because of their performance history in the securities and the difference in their LTV requirements from FHA and GSE loans, this would mean specifically VA cash-out refinances in excess of 90 percent.
The maximum mortgage for a no cash out refinance with an appraisal (credit qualifying) is the lesser of the 97.75% Loan-To-Value (LTV) factor applied to the appraised value of the property, or existing debt. The total FHA first mortgage is limited to 100% of the appraised value, including any financed upfront mortgage insurance premium (UFMIP).
· FHA cash-out maximum loan-to-value (LTV) is 85 percent of the home’s current value (a new appraisal is required) compared to the maximum conventional cash-out LTV of 80 percent. The higher limit is why many homeowners choose an FHA refinance instead of conventional.
Up to 95% LTV on FHA first mortgage that does not exceed $417,000. Otherwise limited to 85% ltv. standard cash-out maximum mortgage calculation up to 95%. current appraised value is used in determining maximum loan amount. There are no seasoning requirements for subordinate liens. standard ltv on FHA first mortgage.
Until April 2009, a cash-out refinance could be as much as 95 percent of a home’s loan-to-value amount. The housing bust of 2007 led to tighter requirements and stricter guidelines. FHA has made.
FHA Cash-out Refinance Mortgages Sometimes It Pays to Refinance. The FHA cash-out refinance option allows homeowners to pay off their existing mortgage, and create a larger home loan that provides them with extra cash. The amount of money that can be borrowed depends on the amount of equity that’s been built up in the home’s value.