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FHA refinance loans and the FHA streamline refinance allow borrowers to reduce the interest rate on their current mortgages. Refinancing your home loan involves the same process and work as you put into your first mortgage.

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FHA Refinance Loans for Homeowners

Learn About the FHA Cash-Out Refi and Other Programs

With home values continuing to rise, homeowners have gained more equity in recent years. This may allow you to refinance your home and eliminate existing monthly mortgage insurance premiums. You may also use that equity to pay off high interest credit debt or use the cash for home repairs.



Homeowners enjoy the benefits of investing in their property year after year. For some, there comes a time when that investment can come in handy. Refinancing with an FHA loan can prove to be an effective way to put that equity to work. Keep in mind that FHA refinancing is only available to homeowners who are currently using their home as their principal residence now.

FHA Cash-Out Refinance

FHA Cash-Out Refinance

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 taking out another mortgage for more than they currently owe. To be eligible for an FHA cash-out refinance, borrowers will need at least 20 percent equity in the property based on a new appraisal.

A Cash-Out Refinance can be a smart option for many homeowners. Whether it’s for home improvement, college tuition, debt consolidation (to pay off other high interest rate loans), student loan debt, or home remodeling, you can access money that you have in an illiquid asset.

  • Credit Score Guidelines
    Applicants must have a minimum credit score of 580 to qualify for an FHA cash-out refinance.
  • Debt-to-Income Ratio Guidelines
    The FHA has guidelines regarding an applicant's debt-to-income ratio in order to keep people from entering into mortgage agreements that they cannot afford.
  • Maximum Loan-to-Value Guidelines
    FHA Cash-Out Refinance loans have a maximum loan-to-value of 80 percent of the home's current value.
  • Payment History Requirements
    Documentation is required to prove that the borrower has made all the monthly payments for the previous 12 months.



FHA Streamline Refinance

FHA Streamline Refinance

This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. FHA Streamline Refinance also cuts down on the amount of paperwork that must be completed by your lender saving you valuable time and money.

  • Your Current Mortgage Must Already Be FHA-Insured
    While refinancing from a conventional loan to one backed by the FHA is possible, the Streamline option is only available to borrowers with an existing FHA loan.
  • The Mortgage Must Be Current
    This means that you have not missed any payments. You must have made at least 6 monthly payments and have had your existing mortgage for a minimum of 210 days before you can apply for the Streamline Refinance option.
  • There Must Be a Net Tangible Benefit
    The FHA actually requires that there be some advantage for the borrower if they go ahead with a Streamline Refinance.



FHA Simple Refinance

FHA Simple 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. Lenders will require a credit qualification, income, and assets to ensure the borrower meets the loan requirements.

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 Monthly Payments
    Refinancing your home gives you the opportunity to get a lower interest rate on your mortgage, which means smaller monthly payments.
  • Switch to a Fixed Rate Loan
    Even by switching from an ARM to fixed rate mortgage, you could avoid higher monthly payments and will have a set amount to pay every month.
  • Earn Cash on Your Home Equity
    It allows you to borrow cash against your home equity in the case of large upcoming expenses. By liquidating this equity you can get cash-in-hand.



FHA Rehab Mortgages

FHA Rehab Mortgages

Many buyers decide to purchase a home that is significantly older, and not in the best condition. The FHA 203(k) Rehabilitation Loan enables borrowers to finance the purchase or refinance of a home, along with its renovation or "rehabilitation" of the property. HUD allows Section 203(k) financing to be used for:

  • Structural alterations and reconstruction
  • Modernization and improvements to the home's function
  • Elimination of health and safety hazards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding or replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements



FHA Reverse Mortgages

FHA Rehab Mortgages

An FHA reverse mortgage is designed for homeowners age 62 and older. It allows the borrower to convert equity in the home into income or a line of credit. The FHA reverse mortgage loan is also known as a Home Equity Conversion Mortgage (HECM), and is paid back when the homeowner no longer occupies the property.

There are requirements for an FHA-insured reverse mortgage or HECM;

  • The loan is based on the age of the youngest borrower if there are co-signers.
  • Homeowners are required to get consumer counseling and education before a HECM loan is approved.
  • Borrowers must own and live on the property as the primary residence.



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FHA Loan Articles and Mortgage News

FHA Refinance Loans: Why a New Appraisal Is Required

March 15, 2023 - When it’s time to refinance a home loan, there are two basic types of refinancing. One type is an appraisal-required refi loan, the other is a no-appraisal refinance. For FHA loans, the type of refinancing you get without an appraisal is the FHA Streamline Refinance Loan.

FHA Cash-Out Refinance Loans and Your Taxes

March 8, 2023 - Some borrowers want to know whether the money they take in cash when an FHA Cash-Out Refinance loan closes is taxable on federal income taxes and whether there are allowable deductions associated with cash-out refinances.

Should I Make an FHA Mortgage Payment Twice Each Month?

March 6, 2023 - How many times a month should you pay your mortgage? That sounds like a silly question to some. After all, mortgage payments are due once per month, and you should pay on time. Why pay twice a month?

FHA Streamline Refinance Loans in 2023

February 18, 2023 - There are many different types of refinance loans available. One government-backed home loan option is called the Streamline Refinance. It’s open to FHA borrowers and those who qualify for the VA home loan program.

FHA 203(k) Rehabilitation Loan Planning

February 17, 2023 - If you are interested in buying a fixer-upper home or refinancing your current home with an FHA 203(k) Rehabilitation Mortgage, there are important steps to take in the planning stages to help you get off to the right start.

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.