Atlanta, Georgia -
Moreira Team | MortgageRight, a company based in Atlanta, GA, has recently released a blog post that explains what is cash out refinance and its requirements, such as credit score and how much cash can be obtained. The article points out that typically, as much as 80 percent of the total home value can be obtained through a cash out refinance. This is the loan-to-value ratio (LTV). It is important to remember, however, that if there is any existing unpaid amount or a new home financing arrangement, such amount should be deducted from the amount that can be received.
Meanwhile, interest rates for cash out refinance usually range from 0.125 to 0.5 percent higher compared to no-cash-out refinance rates. As with any home financing deal, the actual rate offered will be based on the the homeowner’s credit score, LTV, and possibly also the amount to be borrowed. Alvaro Moreira, Director of Strategic Growth at Moreira Team | MortgageRight, says, “The best interest rates go to two different groups. The first is anyone with a credit score over 740. The second is anyone with a low LTV rate. Your interest rate will also go up based on how much equity you cash out from your home.”
There are a number of cash out refinance options, which are: VA cash out refinance; FHA cash out refinance; jumbo cash out refinance; and conventional cash out refinance. Homeowners can take advantage of the conventional cash out refinance when they want to use the equity of their home. Such an arrangement can be done in Freddie Mac and Fannie Mae. These refinancing arrangements can used to get the needed cash for whatever valid reason. For conventional cash out refinance, the following are the guidelines: up to 80 percent of the LTV amount of one’s primary residence; up to 75 percent of the LTV of one’s vacation home; a cash out refinance credit score of at least 640; and a debt to income ratio of not more than 45 percent.
The VA cash out refinance option is for eligible veterans or surviving spouse, or active military members. This will allow access to the equity of the home to update one’s credit card payments, home renovations, or any unexpected expenses. Eligible individuals can cash out 100 percent of the home’s appraised value for any reason, without having to pay for home financing insurance. Requirements include: certificate of eligibility; at least 640 FICO score; the property is one’s primary residence; and debt to income ratio not to surpass 45 percent.
Another option is the FHA cash out refinance, which allows access to a maximum of 80 percent of the appraised home value in the form of a lump sum. The requirements are similar to an FHA home financing deal. It will require: at least a 640 credit score; debt to income ratio not exceeding 55 percent; but home refinancing insurance will have to be paid monthly.
And finally, there is the jumbo cash out refinance. The amount obtained here can be used for financing a child’s college expenses, home improvements, credit cards, and paying off some consumer debts. Guidelines for the jumbo cash out refinance include: cash available up to 80 percent LTV; no need for monthly home refinancing insurance payments; up to a maximum of 43 percent debt to income ratio; self-employment acceptable as long as with financial history; income from W-2’s; liquid assets needed to secure the amount borrowed; no prepayment penalties; and up to a maximum of $3 million available.
The Moreira Team | MortgageRight has set as their goal to help home buyers acquire a new home or refinance an existing home in an equitable and transparent manner. The process they undertake will have to be authentic, without any regard for sales, where home buyers or the homeowners will actually feel good about the entire process because they have been assured that the Moreira Team has made their long term life goals and best financial interests their top priority.
Those who want to know more about the cash out refinance credit score and other requirements can check out the Moreira Team | MortgageRight website or contact them on the telephone or through email.
SOURCE: Press Advantage [Link]
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