September 12, 2024
What do you need to know about FHA refinance loans? If you are considering your options and aren’t sure about some aspects of the FHA refinance process, you may find some answers to your questions below.
FHA Refinance Loan FICO Score Requirements
FHA refinance loans typically require credit checks and appraisals. There is one exception. There is no FHA requirement for either when you are applying for an FHA Streamline Refinance mortgage.
If you need to refinance but worry about your ability to qualify for an FHA mortgage due to credit issues or other problems?
Contact the FHA directly at 1-800 CALL FHA. Request a referral to a local, HUD-approved housing counselor who can assist you with planning, budgeting, and other important credit application issues ahead of any purchase or refinance loan application.
Remember, it’s very important to come to the refinance loan application process with 12 months or more of on-time payments on all financial obligations for best results.
Yes, You Can Shop Around For An FHA Refinance Loan
Refinancing an existing FHA mortgage or into an FHA mortgage doesn’t require you to stay with the original loan servicer. Any participating lender willing to work with you can accept your FHA refinance loan application.
What’s more, you are not required to refinance into the same type of loan. You can refinance into a fixed rate, adjustable rate, into a 15-year loan from a 30-year mortgage or vice-versa, etc.
Repairs, Remodels, And More With The FHA 203(k) Rehab Loan
FHA 203(k) rehab loans for fixer-uppers are also available as refinance loans and the qualifying requirements are the same as other FHA loan options. These loans require some added considerations depending on the size and scale of the rehabilitation work.
If you have a large amount of work to do you may need a “standard” FHA rehab loan, but smaller projects may only require the “Limited” 203(k) Rehabilitation Refinance. Be sure to tell the lender about the size of your project so you can discuss the right size loan for your needs.
Getting Cash Out With An FHA Refinance Loan
The FHA Cash-Out Refinance Loan is the option you want if you want to get cash back at closing time on your refi transaction. Other FHA refinance loans don’t allow unrestricted cash to the borrower at closing.
All funds for programs like FHA 203(k) or Energy Efficient Mortgages may provide for an amount of cash to be used for approved purposes only. An appraisal and a new credit check are both required for cash-out loans.
Streamline Refinancing For Existing FHA Mortgages
Want to get into a lower mortgage rate or monthly payment with your existing FHA mortgage? Do you need to refinance out of an adjustable-rate mortgage? The FHA Streamline Refinance loan is an option worth considering.
There is typically no FHA-required credit check or appraisal. An FHA Streamline Refinance loan is generally required to provide a “tangible” benefit to the borrower such as lower payments or getting a fixed-rate mortgage.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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