A FHA Loan
If you have an FHA loan, you can use
a refinance to lower your monthly payments. Remember
FHA approvals take a little longer, but closing costs
are usually lower. Also you may finance your closing
costs in the new loan amount on an FHA loan. FHA also
has a special program, called the 203(k), designed to
help homeowners rehabilitate homes. If you are planning
to do home improvements, don’t overlook this option.
A VA Loan
VA mortgage holders also have a refinance
option similar to the FHA—for the purpose of lowering
monthly payments. Like the FHA refinancing, this is
a fixed rate mortgage. There is also a VA cash out refinancing
program, but it is only guaranteed to $36,000.
Consider the ARM
Many people who are intending to make
home improvements consider the ARM. They have lower
payments due to lower interest rates in the beginning
of the loan, and use the cash for improvements. Often
they sell the house at the end of the adjustment period,
and move on to a better house.
These are just a few of the many options
available to those who are refinancing. If you are considering
this move, be sure to speak with several lenders to
get the best possible range of options, and therefore
the best package for you.