Refinancing debt with an FHA loan to consolidate multiple bills into one new loan has become a popular option for homeowners. FHA, the Federal Housing Administration allows homeowners to borrow up to 95% of their home’s value for a cash out refinance. This cash out can be used to refinance debt the homeowner has including: credit cards, student loans, automobile loans, personal loans, and second mortgages or home equity lines of credit.
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by getting a new mortgage for more than they currently owe, the difference after paying closing costs and the new escrow account is the cash out. This allows homeowners to access the equity they have built up in their home. FHA does require the homeowner to have owned their current home for at least one year before obtaining a cash out refinance.
Taking consumer debt and converting it into a mortgage can be financially beneficial. Refinancing expensive credit card debt into a tax deductible, low rate mortgage can be a good thing as […]

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