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. Home Purchase and Refinance Loans

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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 Rehab Loan Options You Might Consider

January 17, 2024 - The FHA 203(k) rehabilitation mortgage is a type of FHA loan you can use to buy and renovate a home or refinance an existing mortgage and renovate the home simultaneously. There are options you need to know and a few things that you should cross off your list of options.

Refinancing With an FHA Loan in the New Year

January 9, 2024 - As mortgage rates begin to fall in 2024, some borrowers and potential FHA loan applicants want to know what kinds of refinance opportunities might exist in the new year and what property types. We examine some of the strongest options below.

Hope for Refinance Loans in 2024

December 22, 2023 - 2023 was not a great year to look for a refinance loan. Interest rates flirted with the 8% range in 2023, and anyone with an existing loan wouldn’t want to refinance into a higher rate. Rates began moving back to the 7% zone with many expecting further recovery and a downward trend.

Why FHA Home Loan Rates Are Recovering

December 14, 2023 - The Federal Reserve took measures to control inflation, including raising the cost of lending money by increasing the Federal Funds Rate. That rate, previously just above 0%, has risen as high as 5.5%. Those higher rates made people with lower rates stop plans to refinance.

Housing Market Predictions for 2024

December 13, 2023 - Real estate brokers and listing services typically publish articles discussing their predictions for the new year late in the current year. This year is no different. A wide range of financial and real estate pundits and publications have chimed in on what they view as the future of real estate.