Refinance Loan Options, Cash Out Or Streamline

Thinking about your refinance options? If you haven’t refinanced before you might be wondering which of your home loan refinance options in 2015 are going to require a new appraisal and credit check, and which do not.

Your options are varied--some refinance loans including VA, FHA and conventional loans have features that give the borrower a lower interest rate or monthly payments but don’t offer cash back to the borrower.

Other refinance loan options may permit you to apply for a loan that features cash back based on your home’s equity and/or appraisal value. When you apply for these loans a new appraisal is definitely required in order to determine the value of your loan in the current housing market.

Some refinance loans are offered as no credit-check loans and/or no-appraisal loans. Why are some loans more strict than others in this regard? In the case of FHA or VA Streamline Refinance loans, these two agencies do not require a new credit check or appraisal. If you wanted to refinance the mortgage on a California home purchased with a VA or FHA mortgage, you would apply for the Streamline Refinance using the same basic credit qualifying data you used to get the original FHA or VA home loan, under the basic terms of the loan.

But that does not mean that your lender might not require a new credit check and/or appraisal anyway.

The no-appraisal loan is offered for Streamline refinancing, but not for cash out refinance loans or home equity conversion mortgages where the borrower is tapping into the built-up value in the property. Any time money going back to the borrower on the deal, the credit check is required to insure the borrower can still afford the loan—monthly mortgage payments may or may not increase as the result of this kind of refinancing, but the lender will still do the math to make sure the borrower can afford the new loan.

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