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The FHA refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly, sometimes without an appraisal.

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May 22, 2019
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FHA Simple Refinance

Sometimes It Pays to Refinance

The FHA Simple Refinance allows homeowners to go from their current FHA Loan into a new one, whether it's a fixed-rate loan or an ARM. This refinance is the most straightforward, and there is no option for cash-out.

With the Simple FHA Refinance, lenders will require a credit qualification, which is the process of analyzing credit, income, and assets to ensure the borrower meets the requirements for the new loan terms. There is also a home appraisal, to see how much the house has increased in value. This loan can include all of your closing costs and prepaid items in the loan amount, as long as the amount falls within the appraised value; up to 97.75 percent loan-to-value.

Simple Refinance vs. Streamline Refinance

Many borrowers wonder about the benefits of an FHA Simple Refinance when compared to the Streamline Refinance. Why go through the credit qualification process when you can avoid the hassle? Both types of refinances can benefit a borrower depending on the situation. The Streamline is a good option when refinancing homes that have not risen much in value, or if you're planning to sell your home soon, so you want to avoid adding closing costs to your principal. The FHA Simple Refinance allows you to keep your out-of-pocket costs very low, and possibly get much lower interest rates where home equity is available. Depending on your immediate needs and long-term goals, your loan officer will be able to help you make the best decision.

Benefits of Refinancing Your Home

Homeowners should think about several factors while considering the benefits of refinancing their mortgages. Below are some of the most common goals borrowers have when moving forward with their refinance options.

Lower Your Monthly Payment
Refinancing your home gives you the opportunity to get a lower interest rate on your mortgage, which means smaller monthly payments. This is a good option if you're a homeowner looking for a little more disposable income, since you'll be paying less towards your mortgage every month.

Switch to a Fixed Rate Loan
Even by switching from an ARM to fixed rate mortgage, you could avoid higher monthly payments. ARMs offer low, fixed rates for the introductory period of the mortgage, after which you are at the mercy of a fluctuating market. The rates can rise suddenly, and you're left with high monthly payments. By refinancing to a fixed rate mortgage, you will have a set amount to pay every month, which gives you the freedom to budget more effectively.

Earn Cash on Your Home Equity
A cash-out refinance allows you to borrow cash against your home equity in the case of large upcoming expenses. By liquidating the equity you've already amassed, you can get cash-in-hand. The downside is that you are left with a new home loan with a principal larger than before. Despite the additional, long term cost of a cash-out refinance, it is a good opportunity for homeowners who need instant funds for renovations, tuition bills, or emergencies, without having to sell their home to make money.


FHA Refinance Options for Homeowners

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FHA Loan Articles and Mortgage News

FHA Loan Tips for Signers and Co-Signers

May 13, 2019 - FHA home loans and refinance loans are designed for either a single borrower or multiple borrowers; procedures for approving loans for multiple borrowers are more or less the same as for a single applicant. The lender must determine that all parties on the loan are creditworthy.

FHA Cash-Out Refinance Loan Tips

May 11, 2019 - FHA cash-out refinance loans do require an appraisal, and borrowers who live in housing markets that are on the rise should check to see how far property values have increased since the last appraisal.

What to Do Before Refinancing

May 8, 2019 - Remember, it’s better to take longer to prepare for your refinance if you need to in order to fix things like payment history (a recommended 12 months of on-time payments for all bills) or correct identity theft issues on a credit report.

Converting Your Home Equity Into Cash

May 3, 2019 - The FHA Cash-Out Refinance loan is a tool a homeowner can use to refinance the home and take cash back on the transaction. What does the FHA home loan rulebook, HUD 4000.1, have to say about these loans compared to other FHA refinance options?

Refinancing the FHA Adjustable Rate Mortgage Before Reset

May 1, 2019 - ARM introductory rates will expire at some point depending on the terms of your mortgage loan agreement. Borrowers who want to avoid an interest rate adjustment have the option to refinance the mortgage and escape the ARM loan reset.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!