FHA refinance loans can be used to accomplish a number of goals, For instance you can:

• Convert your ARM into a fixed
• Refinance into a lower rate and payment
• Get cash out for debt consolidation
• Shorten your mortgage term
• You can even rehabilitate or upgrade your home

When refinancing without cash out, FHA loans will allow a loan amount of up to 98.75% of the appraised value of the home. This is especially important if you have purchased your home recently and financed a high percentage when you bought it. Whether converting an ARM to a fixed, lowering your interest rate, or trying to reduce your monthly PMI costs, FHA loans are a great choice when refinancing your current mortgage.

When taking cash out, FHA loans allow you to finance up to 85% of the homes value. This may be significantly higher than you would qualify for utilizing a conventional loan, and therefore will allow you to get more cash for things like debt consolidation, home improvements, vacations, school, etc. FHA also does not require a higher rate when taking cash out, making FHA loans the best choice for refinancing for this purpose.

FHA Streamline Refinance

If you have an FHA loan currently, FHA allows for a streamlined refinance. An FHA Streanline refinance does not require an appraisal, income qualification, or have any asset requirements. The only requirement is that the new FHA loan meet one of several benefits:

• Reduce the interest rate
• Convert an ARM to a fixed rate
• Shorten your mortgage term
• Convert a 203(k) rehab loan into a standard 203(b) FHA loan

If the new loan meets any of these requirements, it may qualify as an FHA Streamline refinance. In addition to meeting one of the above, there are several additional requirements that you must meet:

• Your current FHA loan must be at least one year old
• You must have been current on your current FHA loan for the past 12 months
• The new loan must offer a reduced payment, or a shorter term without increasing the payment by more than $50
• If your current loan is an ARM, the new fixed rate may not be more than 2 percentage points higher than the rate on the current loan 

Contact one of our loan specialists to find out more.