NJ Cash Out Refinance

NJ Cash Out 

NJ Cash Out 

FHA loan requirements - The FHA program was created as part of the National Housing Act on June 28, 1934. FHA was created to help stimulate the housing market making loans more accessible and more affordable. The FHA program was created as a result of The Great Depression to help anyone including families, the elderly, people on disability and lower-income families be able to buy a home.

After the financial crisis of 2008 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines.

After the COVID-19 pandemic of 2020 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for the loans they will approve, they may require a higher credit score for their FHA loans. These requirements are the bank's guidelines

FHA World - NJ Cash Out Refinance

The Cash Out loan program allows for a mortgage refinances of owner occupied properties. The maximum cash out refinance loan cannot exceed 80% of the appraised value of the home, which is 5% less than on a FHA loan.

As cash out refinance mortgage is defined as follows: A mortgage refinance where borrower gets more than $2,000 back after close of transaction, and / or, any refinance that involves consolidating a second mortgage or equity line that is less than 1 year old.

The cash out from your refinance mortgage can be used for any of the following:

• Home Improvements
• Bill Consolidation (and mortgage if second is less than 1 year old)
• Large Purchases
• Schooling
• Vacation
• Investment(s)
• Cash

You do not have to have an existing FHA loan in order to do a cash-out refinance. You may use the cash out refinance for 1-4 unit properties.

What documentation will I need?

• W2's for the past 2 years
• Current pay stubs for the past month
• Bank statements for last 2 months for each active account with sufficient reserves (all pages)
• Latest retirement statement for each active account (all pages)

Credit score - On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.

• FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
  
• Borrowers with less than a 580 credit score will be required to put down at least 10%
• Minimum 500 credit score
  

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

www.MORTGAGE-WORLD.com LLC is an online mortgage company specializing in FHA loans for first time home buyers.