FHA Loan Refinances: Requirements, Pros, and Cons
Reading Time: 3 minutesRefinancing your FHA loan can be a strategic way to achieve your financial goals, whether you want to lower your
With down payments starting at 3.5% and flexible credit requirements, FHA loans make it easier to achieve your homeownership goals.
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Put down as little as 3.5% of your home's purchase price.
Your credit doesn’t have to be perfect—you may still qualify, even with past financial challenges.
Choose a 15-year or 30-year term, whether you're buying or refinancing.
If your details are close to these guidelines, we encourage you to apply or talk to us. Even if an FHA Loan isn't the right fit, we may have other options that work for you.
Whether you're buying a new home or refinancing your current mortgage, we've got you covered.
You'll pay an upfront mortgage insurance premium of 1.75% of the loan amount, along with a monthly MIP.
You'll need a credit score above 580 and a manageable debt-to-income ratio (DTI).
Along with your down payment, you'll need sufficient funds to cover closing costs.
Estimate your monthly payments quickly and easily. Adjust loan terms, down payments, and interest rates to find the best fit for your budget.
See how refinancing can lower your monthly payment or help you access cash. Compare options and find out how much you could save.
Common Questions About This Loan — Answered for You
No, repeat home buyers may also qualify for FHA loans. You can also use an FHA loan to refinance your current mortgage.
Since FHA loans are backed by the government, their interest rates tend to be lower than those of conventional mortgages. Your rate will depend on your credit history, loan amount, down payment, and other factors, but FHA loans often provide a more affordable rate option for many homebuyers.
Absolutely! Although FHA loans allow a minimum down payment of 3.5%, you can choose to put down more if you’d like. A larger down payment can lower your monthly payments and reduce the amount of mortgage insurance you need to pay over the life of the loan.
Yes, FHA loans allow co-borrowers, which can be especially helpful if you need extra income to qualify.
Your co-borrower needs to be a family member. The FHA considers the following as eligible family members:
Yes, FHA loans allow you to use down payment assistance programs. Many local and state programs offer assistance that can be applied to your down payment, making FHA loans even more accessible for qualified buyers who need additional support.
An FHA refinance allows you to replace your existing home loan with a new one, often with more favorable terms.
FHA Simple Refinance: Available to homeowners with an existing FHA loan who want to lower their interest rate or monthly payment. This option also allows for switching from an adjustable-rate mortgage (ARM) to a fixed-rate loan.
FHA Streamline Refinance: For current FHA borrowers looking to simplify the refinancing process. It typically doesn’t require an appraisal or extensive credit review.
FHA Cash-Out Refinance: Allows you to take out a new mortgage for a larger amount than your current loan, with the difference paid out in cash in a lump sum.
Find out how FHA loans offer flexible credit and low down payment options, making homeownership more accessible. Dive into the benefits of FHA loans.
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