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

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

Does the FHA Offer an Owner-Builder Loan Option?

February 13, 2023 - Does the FHA loan program include an owner-builder loan? Some borrowers want to build or renovate a home themselves without a contractor’s help. An owner-builder loan can help but in typical cases, the loan applicant must show proof they can actually succeed in doing the work.

What Is a Cash-Out Refinance?

February 6, 2023 - If you want to pull the equity out of your home in cash, you have options such as a conventional home equity line of credit, but you also have the FHA Cash-Out Refinance as an option to consider. This refinance loan lets you take equity out of the home in cash.

Learning How to Buy a Home

January 28, 2023 - Interested in buying a home with an FHA mortgage but you aren’t sure where to start? There’s good news--the FHA offers free referrals to local, HUD-approved housing counseling agencies in your area that can help.

Choices to Make When Renovating Your Home

January 21, 2023 - Thinking about buying a fixer-upper with an FHA 203(k) Rehabilitation Loan? Or are you considering a home improvement project financed with an FHA Cash-Out Refinance? You have a set of choices to make far beyond selecting a lender, deciding on the loan type and term, etc.

Problems That May Delay Your FHA 203(k) Rehab Loan

January 19, 2023 - If you want to buy a fixer-upper, there are some issues to pay attention to before and after you apply for your loan you should be aware of. This is in addition to mortgage loan interest rate trends and changing prices in the housing market.