Beginning January 1st, FHA will require a second appraisal for those who are refinancing and taking cash out to more than 85% of the value of the home. This is regardless of the loan amount or the property location.
The property must be the borrower's primary residence for at least 12 months before the loan application, and must be either a 1 or 2-unit building. In addition, the borrower must have made each of the previous 12 mortgage payments on time.
If there is a second mortgage or home equity line of credit that will remain in place, it must be subordinated to the new first mortgage. The combined loans can exceed the value of the property provided the borrower's income is sufficient to meet the mortgage payments as well as all other debt obligations
If a co-borrower is to be added to the new mortgage, he or she must be living in the home. Non-occupant co-borrowers will not be permitted under this program.
1 Comments on New FHA Requirements for Cash-Out Refinances Go Into Effect January 1st
JAN
11
2009
The second appraisal for cash out refinances should be interesting. We will see how this plays out. I think I know, however sometimes I get surprised by people's reactions.
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The second appraisal for cash out refinances should be interesting. We will see how this plays out. I think I know, however sometimes I get surprised by people's reactions.