FHA Cash Out Refinance Calculator
What is your current loan situation
How to Use the FHA Cash Out Refinance Calculator
In order to use the FHA cash out refinance calculator you need to determine what you currently owe on your property (your loan balance).
In the two boxes, enter in your current loan balance and the estimated value of your home.
Then, click “calculate”. This will provide you with the maximum amount you are able to borrow apart from your current loan balance (assuming you qualify).
FHA loan guidelines restrict cash out loans to a 80% LTV. It used to be 95%, but HUD changed the guidelines in September , 2019.
FHA Cash Out Refinance Requirements
Below are the 2023 FHA cash out refinance requirements:
- Credit Score – A 620 credit score is required to get an FHA cash out refinance loan.
- Owner Occupied – The FHA cash out loan is only offered to borrowers on homes that are owner
occupied, no investment properties are eligible to apply for this FHA program.
- Payment History – A 12 month payment history with no more than one 30 day late payment is required.
You may be eligible for to apply after 6 months in your home, but the original appraisal would be used.
- Appraisal – In order to use a new appraisal, you must have lived in your home for at least 12 months.
If you have not lived in your home for a full year, you still might qualify, but a new approval would not be
allowed. Your original appraisal would be used, or your home purchase price, whichever is the lesser amount.
- Income / Assets – Borrowers, along with co-applicants who live in the home, must have qualifying debt-to-income
ratios. The mortgage payment (principle, interest, taxes, and insurance) must not exceed 29% of your income.
Your total DTI ratios must not exceed 41%, which includes other liabilities such as car payments and credit cards.
Exceptions to this rule are sometimes allowed. When applying, borrowers must submit two years tax returns
and copies (or stubs) of two most recent paychecks.
- FHA Mortgage Insurance – Something to consider is that FHA loans require two types of mortgage insurance.
The upfront mortgage insurance premium is 1.75%. So a $200,000 loan amount would require $3,500 to be
added to the principle loan amount. The second part of FHA mortgage insurance that is required is the monthly
mortgage insurance premium. As of 2023 this amount is 0.55%. If you only need to borrow up to 80% of your
home’s appraised value, you might want to see if you are eligible for a conventional cash out refinance loan.
It is best to compare both options to see which saves you the most money, while still meeting your cash out needs
(how much you need or want to take out).