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Are you thinking about a refinance loan for your home? When interest rate news points to a general downward trend in mortgage loan interest rates, many are tempted to get a better deal on their loan by refinancing into a lower rate. 

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October 23, 2019
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

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Questions and Answers About FHA Refinance Loans

Questions and Answers About FHA Refinance Loans
July 13, 2019 - Are you thinking about a refinance loan for your home? When interest rate news points to a general downward trend in mortgage loan interest rates, many are tempted to get a better deal on their loan by refinancing into a lower rate. But there are rules you should be aware of for FHA refinance loans that can affect your choices in refi loan products. Do you know what they are?

Do FHA Refinance Loans Require Occupancy?

Yes. Borrowers will be required to furnish proof in some cases that the home being refinanced is the primary residence. How is this done? Consider what the FHA loan handbook says of FHA Streamline Refinancing: 

“The Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence that the Borrower currently occupies the Property as their Principal Residence.” 

Occupancy is generally required (by at least one borrower obligated on the note) as a condition of loan approval.

Can I Refinance out of a Fixed Rate Loan into an Adjustable Rate or Vice Versa?

Yes. FHA loans allow you to refinance out of an adjustable rate loan, into one, or to refinance one adjustable rate mortgage into another adjustable rate mortgage. 

FHA Streamline Refinance loans are advertised as offering a tangible benefit for borrowers who wish to end the adjustable rate mortgage and begin a fixed-rate loan. You have multiple options whether refinancing an existing FHA loan or a non-FHA mortgage.          

I Have an FHA Loan. Is a No-Credit Qualifying Refinance Possible?

Those with existing FHA mortgages have the option to apply for FHA Streamline Refinance loans, which feature no FHA-required credit check or appraisal in most cases. The lender’s standards may require a credit check, or they may not depending. All Streamline loans will be processed based on the borrower’s credit record and history of responsible credit use.

I Just Bought My Home. How Long Do I Have to Wait to Refinance?

You may be permitted to refinance early in the mortgage depending on the kind of home loan you want to refinance and the kind of refinance loan you wish to use. For example, FHA-to-FHA Streamline Refinances require a minimum six-month, six payment waiting period. Cash-out refinance loans may require longer wait times (12 months or more).

The waiting times mentioned here are FHA minimums; ask a lender about that financial institution’s policies in case their own requirements are greater than the minimums.

Who Can Help Me Refinance into an FHA Home Loan?

Any participating FHA lender can help you if that financial institution offers the kind of refinance loan you need. Not all FHA lenders offer all FHA loan products, so it pays to shop around for the right lender.

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