FHA Refinance Loans - Guidelines & Benefits

09.15.2020 | Category: Homebuying

Sponsored by the U.S. Department of Housing and Urban Development (HUD), FHA loans are government-backed home loans distributed by private lenders like Mutual of Omaha Mortgage. FHA loans are federally insured, meaning that buyers do not face a steep down payment or credit requirements compared to conventional loans. Because of these loan benefits, FHA loans are often used to fund homes for first-time home buyers,borrowers who have less than perfect credit history or borrowers who have prefer lower down payment requirements.

You Can Refinance Your FHA Loan, and Mutual of Omaha Mortgage is Here to Help

At Mutual of Omaha Mortgage, we pride ourselves on hiring knowledgeable mortgage experts to handle your unique refinance needs. We aim to give the most comprehensive FHA loan refinance experience in the business. Our dedication to helping you through every step of the process is unwavering. Whether you’re looking to shorten your loan duration, lower the rate, or move into a different loan program, we want your FHA refinance to succeed.

The FHA Streamline Refinance - What is it and Should You Consider it?

The FHA Streamline is a special refinance program designed specifically to help homeowners with an existing FHA mortgage refinance their home to take advantage of favorable market conditions with minimal documentation requirements. This can not only make the whole refinance process easier, but it can also help to expedite your home refinance.

The streamline refinance term is used to designate loans with ‘low documentation’ requirements. When you utilize the FHA streamline refinance program your lender isn’t required to verify your income/job, check your credit score or order a new home appraisal. As long as you’ve made consistent, on-time mortgage payments for the last 6 months, you are likely to qualify for an FHA Streamline Refinance.

Thanks to the minimum guideline requirements, the FHA streamline can offer homeowners an opportunity to lower their monthly mortgage payment or update their loan terms, even if they’ve recently suffered a job loss or reduction in hours. Depending on the amount of equity that you’ve built within your home, you may also be able to cash-out a portion of the equity that you’ve built within your property.

Benefits to an FHA Streamline Refinance

In addition to offering homeowners the chance to take advantage of market conditions, the FHA streamline refinance offers homeowners with an FHA mortgage a variety of benefits.

The opportunity to lower your FHA Mortgage Insurance Premium - If you purchased a home between 2010 and 2015 with an FHA mortgage, you may be able to lower your annual FHA mortgage insurance premiums by refinancing thanks to reduced costs for FHA MIP. This can lead to lower monthly premium costs for homeowners who refinance.

Low interest rates - Thanks to favorable market conditions, interest rates on FHA loans have remained near historical low rates.

FHA Mortgage Insurance Premium (MIP) refund - Homeowners who use the FHA Streamline Refinance may be refunded up to 68 percent of their prepaid mortgage insurance premium, in the form of an MIP discount on their new refinance loan. To take advantage of the MIP refund, homeowners will need to refinance within the first 3 years of owning their home. Your loan officer will be able to review your specific situation and provide additional information about your ability to qualify for the MIP refunds 

Lower documentation requirements - Thanks to relaxed documentation requirements, the FHA streamline refinance guidelines don’t require your lender to re-verify your income/job, check your credit score or order a new home appraisal. If you’ve made consistent, ontime mortgage payments for the last 6 months, you may be able to qualify for an FHA Streamline.

Considering whether you should refinance your FHA loan? For homeowners interested in an FHA Streamline Refinance, we’re happy to provide a no obligation quote. Simply get started online or give us a call at 1-800-24-RATES

Refinancing from FHA to Conventional

Depending on your financial situation and how much equity you’ve built within your home, you may also be able to refinance your FHA loan into a conventional loan. This can help homeowners who have built more than a 20% equity position in their property eliminate mortgage insurance from their monthly payment. Not only can this help reduce your total monthly costs, but it could help you save thousands over the life of your loan.

It’s important to remember that conventional loans have a stricter set of qualifying guidelines compared to the FHA program. You’ll want to work with a lender to better understand the qualifying requirements and if your financial situation will work for the loan parameters.

Mortgage Can Help You Navigate FHA Streamline Refinance Loan Guidelines to Achieve Your Goals

We know that many people use their home not just as a living space, but as an investment. At Mutual of Omaha Mortgage, we’re committed to finding a refinance solution that fits your goals and objectives. Whether you're looking to pay your mortgage off sooner, lower your monthly payment or take cash out for a major purchase or renovation, we’re here to help make your mortgage work for you.