Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. An FHA refinance is a way to save money by changing your loan term or interest rate, something many homeowners look to do when rates are low. But the Federal Housing Administration has refinancing options that can help you accomplish other goals beyond lowering your monthly mortgage payment.
Knowing more about the different kinds of FHA refinance loans available can help you decide if one is right for you. Each type of refinance has slightly different qualification standards, but the basics are similar to FHA purchase loan requirements. You may be able to get approved for an FHA refinance with a lower credit score or higher debt-to-income ratio than a lender would look for in a conventional refinance. You may want to refinance your FHA loan to decrease your interest rate, change to a shorter mortgage term or take on a costly project like a major home renovation.
If you're looking to save money, lowering your mortgage rate will typically bring down your monthly FHA loan payments and reduce the total interest paid over the life of the loan. Still, it's important to remember that you won't truly enjoy those savings until after you've reached the break-even point. That's when your refinance savings equal the amount you spent on the refinance itself. FHA refinances can come with considerable closing costs, which may include an appraisal. And with any FHA refinance, you'll have to pay a new upfront mortgage insurance premium equal to 1.
If you're refinancing an FHA-insured mortgage that's less than three years old, you'll get a closing credit that partially refunds the new upfront mortgage insurance premium. If you're refinancing to change your interest rate or loan term, the most basic option is a rate and term refinance if you do not currently have an FHA loan or an FHA simple refinance if you are refinancing an existing FHA loan. Streamline refinance refers to the refinance of an existing FHA-insured mortgage requiring limited borrower credit documentation and underwriting.
Streamline refinances are available under credit qualifying and non-credit qualifying options. The basic requirements of a streamline refinance are:.
Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances actually, no out-of-pocket expenses to the borrower by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash.
Plan ahead if you need to take your equity out as cash for an upcoming expense. A new mortgage rate and the ability to take out needed cash can make the more involved approval process worthwhile. Refinancing may provide an obvious benefit such as a lower payment or a shorter loan term. You can learn more about refinancing and whether it is right for you by speaking with a Home Lending Advisor. Or, you can find out how to begin the mortgage refinancing process.
Please review its terms, privacy and security policies to see how they apply to you. Skip to main content Please update your browser. Please update your browser. Credit Cards. Checking Accounts. Savings Accounts. Home Equity. Invest with a J. Morgan Advisor. Online Investing with J. Chase for Business. Commercial Banking. See all. About Chase J. How to refinance an FHA loan. Meet the loan requirements for credit score, income and other assets Have an appraisal of the property The benefits of Simple Refinancing FHA Simple Refinance is a straight-forward process.
The benefits of Streamline Refinancing FHA Streamline Refinancing is best known for its low requirements that make the process move quickly. What do I have to do? FHA cash-out refinancing If your property has increased in value or you've built up some equity, you may want to refinance your loan to take cash out for an important event, pay down higher-interest debt, finance tuition or remodel your house.
How to qualify Have made at least the last 12 months of payments on time, during which time the home has been your primary residence Have enough equity in your home Meet the minimum credit score Meet debt-to-income ratio standards The benefits of cash-out refinancing With an FHA cash-out refinance, you can potentially lower your monthly payment or change your loan term while taking money out to pay for the things you need. You need to finance or pay an upfront mortgage insurance premium plus pay an annual premium in your monthly payments Cash-out refinances can take longer to be approved and may include higher closing costs than other types of FHA loans, so you'll need to be patient while waiting for your loan to close.
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