Cash out refinance 2016

Cash out refinance 2016

Fannie or Freddie cash out refinance

Fannie Mae or Freddie Mac cash out refinance allows borrowers to refinance up to 85% loan-to-value with a minimum credit score of 620 on a primary residence. And 75% loan-to-value on an investment property 1 unit with a 620 minimum credit score.

VA cash out refinance

The VA cash out refinance loan is for Veterans who want to take cash out of their home. The cash can be used to pay off debt, college tuition or making home improvements. The VA will guaranty loans up to 100% of the value of your home.

• VA minimum credit score is 500

FHA has taken the following steps:

• Update the combination of credit scores and cash out for new borrowers
• New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 85% loan-to-value cash out
• New borrowers with less than a 580 credit score maximum cash out 75% loan-to-value 
• FHA minimum credit score is 500

debt to income ratio

Debt to income ratios are the calculations underwriters use to determine whether a borrower can qualify for a mortgage. They are used to determine if you have the capacity to repay your mortgage.

• Fannie and Freddie maximum debt to income ratio is 45%/55%
• VA maximum debt to income ratio is 45%/55%
• FHA DTI ratio is 45%/55% with credit score above 620
• FHA DTI ratio is 31%/43% with credit score below 620

There are two calculations. The first or Front Ratio is your housing expense-to-income ratio. This is your proposed mortgage payment (principle, interest, taxes, mortgage insurance, and home owners insurance) divided by your gross monthly income.

The second or Back Ratio is your total monthly obligations-to-income ratio. This is your gross monthly payment including Mortgage PITI divided by your gross monthly income.

Closing cost - FHA allows the seller to pay up to 6% of your closing cost.

If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, "Seller will pay up to 6% of buyer's closing cost."

If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,300.00 depending on taxes, insurance and who's paying the transfer tax and owner's title insurance.

By allowing the seller to pay for your closing cost you will decrease the amount of money required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays up to $6,000.00 for your closing cost you will only need around $4,000.00 to buy a $100,000.00 in Florida.

Are you short funds to close? The FHA no closing cost loan allows all of your closing cost to be rolled into your loan including your appraisal fee, hazard insurance premium and even your escrow account.

Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program in Florida?

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Cash out refinance 2016

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