FHA Refinancing: Get to Know Your Options

FHA refinancing offers flexible, government-backed mortgage refinancing options for homeowners who may not qualify for a conventional loan. Explore this program below.

What Is FHA Refinancing?

FHA refinancing programs are insured by the Federal Housing Administration and offer:

Streamlined refinancing options for current FHA loan holders

The FHA Streamline Refinancing program is available to current FHA loan holders and requires minimal paperwork to complete.

Flexible credit and DTI requirements

FHA refinancing is ideal for borrowers who are building their credit or those who have higher debt-to-income ratios.

Higher Allowed Loan-to-Value

Homeowners can use FHA refinancing, even if they do not currently have a lot of equity in their home. This allows the homeowner an opportunity to seek more favorable rates and terms to reach their goals.

What Can FHA Refinancing Be Used For?

To change your loan terms

If the terms of your current home loan no longer fit your circumstances, FHA refinancing can help you restructure your mortgage.

To make energy-efficient upgrades

FHA Energy Efficient Mortgages (EEMs) allow homeowners to refinance their existing loans to include the cost of energy-efficient improvements.

To relieve financial hardship

Certain programs, like FHA Streamline Refinancing, can free up cash flow, provide financial relief, and help borrowers avoid foreclosure.

Pros

Cons

Talk to our mortgage experts today about finding the right loan for you.

Alternatives to FHA Refinancing

Conventional Refinancing

USDA Refinancing

VA Refinancing

How Do I Know If FHA Refinancing Is Right for Me?

You have an existing FHA mortgage

The FHA Streamline Refinance program is specifically designed for homeowners who already have an FHA mortgage. This lets you refinance faster, without a home appraisal or extensive paperwork.

You need access to your home equity

The FHA Cash-Out Refinance program lets you use your home equity for other financial needs. There are no restrictions on how the funds are used, and homeowners can invest the money back into the property or cover other personal expenses.

You can demonstrate a clear benefit from refinancing

To qualify, you will need to show that you stand to benefit materially from refinancing, such as a reduction in your monthly mortgage payment.

When Is the Best Time to Use FHA Refinancing?

The best time to use FHA refinancing is when you’ve reached a key milestone, are recovering from a financial setback, or are planning a major life event. For example, if you’ve recently lost your job or have incurred unexpected expenses, this program can restructure your mortgage to better fit your current circumstances. And if you’re getting married, having a baby, or retiring, FHA cash-out refinancing lets you convert your home equity into cash to cover expenses tied to important life milestones.

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FAQ

Do I need an appraisal for an FHA Streamline Refinance?

Generally, an FHA Streamline Refinance will not require a new appraisal. Instead of using the value of your home to determine your eligibility, the program uses your existing FHA loan details. This makes the process fast and affordable, with minimal documentation and hassle.

Can I refinance my non-FHA mortgage with the FHA?

You can refinance a non-FHA loan by taking out a new FHA mortgage and using it to pay off your existing one, as long as you and the property you want to refinance meet the agency’s eligibility guidelines. However, you can only apply for the FHA Streamline Refinance program if your original home loan is currently an FHA-insured mortgage.

How soon after buying my home can I apply for FHA refinancing?

To qualify for the FHA Streamline Refinance, your existing FHA loan must be at least 210 days old, and you must have had at least 6 months of on-time mortgage payments immediately prior to your application. An FHA rate-and-term refinance also requires 6 months of timely payments, and the FHA cash-out refinancing option requires you to have had your existing FHA mortgage for at least one year.

Can I get FHA refinancing if I’ve made significant improvements to my home?

FHA refinancing can be a great way to tap into the equity created by home improvements with the right program. In this case, it may be better to opt for a standard FHA refinance that requires a new appraisal. This allows the value of your property to be reassessed with the improvements in place, and if it’s much higher, you may qualify for more favorable loan terms.

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