FHA Refinance Loan Requirements and Other Information

There are some requirements that may apply when trying to refinance your current loan with the FHA. Keep in mind these are simply guidelines – each borrower’s situation is different. The best way to work through your options is to talk with one of our specialists.
•    The mortgage that is to be refinanced must ultimately be insured through the FHA.
•    The current mortgage must be current and not be delinquent.
•    The results of the refinance must lower the monthly principle and interest payments for the borrower.
•    No cash may be taken out on mortgages refinanced using the streamline refinance process.

There is the “no cost” refinance which refers to no out of pockets costs for the refinancing. What generally happens on a “no cost” refinance is the lender will charge a higher interest rate and if there were any closing costs paid for or refinanced by the borrower the lender will then pay any closing costs or other costs incurred during the transaction.

Another streamline refinancing option you have includes the closing costs into the new mortgage amount. This of course is only available if enough equity is in the home after it is appraised. The streamline refinance can occur without an appraisal but the new loan will not be able to exceed the original loan amount. If you are not living in the property but rather it is an investment property, the refinance can only occur without an appraisal.

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