FHA Streamline Refinance Loan

Refinance loans
Refinance with an FHA option.

Yes, you can use an FHA loan to refinance your current FHA loan. It’s called an FHA streamline refinance loan. The streamlined process with minimal required documentation from underwriting makes this product extremely attractive.*

An FHA loan can be very affordable. Lower up-front and annual insurance premiums required by the FHA could mean lower payments. And even simply refinancing your current loan may help lower your interest rate and monthly payment. 

While there are potential advantages to refinancing with an FHA streamline loan, there are also some disadvantages. Be sure that you're informed before making any financial decision. 

*Full documentation/credit qualifying may be required in certain situations when removing existing borrowers.

 

Advantages:
  • A minimal credit check is required.
  • A minimal employment verification is required.
  • There are fixed-rate and adjustable-rate mortgage (ARM) options.
  • No appraisal is required.

 

Disadvantages:
  • Mortgage insurance is required.
  • Mortgage insurance could be higher than the current rate.
  • Lenders must be FHA-approved.
  • The existing mortgage must be current and not delinquent.

 

Frequently asked questions:
What determines the interest rate on an FHA streamline refinance loan?

The interest rate is the cost of borrowing the principle loan amount. It’s determined by current rates and the borrower’s credit profile (including credit score).

What type of credit is needed for an FHA streamline refinance loan?

There are two different ways to qualify for an FHA streamline refinance loan: credit qualifying and non-credit qualifying. With a credit qualifying loan, a new credit profile will be reviewed. However, non-credit qualifying means that the loan can be processed without a new credit profile and is possible if specific requirements are met.

What loans can I refinance with an FHA streamline loan?

Only current FHA loans can be refinanced with a streamline loan. All other loan types, including conventional, VA, and USDA, do not qualify.

What is a net tangible benefit?

To qualify for a streamlined refinance loan, you must show that it will be financially beneficial, such as providing a shorter loan term or more favorable interest rate. These financial gains are called net tangible benefits.

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