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An FHA Simple Refinance lets homeowners get a lower interest rate and decrease their monthly payments.

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FHA Simple Refinance

FHA Simple Refinance

With an FHA Simple Refinance, homeowners with a current FHA Loan can refinance into a new one, whether it's a fixed-rate loan or an ARM. The Simple Refinance has no cash-out option and is the most straightforward; lenders require a credit qualification, which is the process of analyzing credit, income, and assets to ensure the borrower meets the requirements for the new loan terms. There is also a home appraisal, to assess the current home value. With an FHA Simple Refinance, the new loan amount can include all closing costs and prepaid items, as long as the amount falls within the appraised value.

Who Can Apply?

It might seem obvious, but to qualify for an FHA Simple Refinance, there must be a calculable benefit from refinancing. A Simple Refinance is only applicable on an owner-occupied principal residence or HUD-approved secondary residences. Borrowers must also be current in their loan payments for the previous 6 months to be considered eligible for a refinance.

Benefits of Refinancing Your Home

Refinancing some time and money on your part, so it's important to ask yourself if you'll be benefitting from the process. Here are some of the reasons borrowers choose to refinance their homes.

  • Lower interest rates mean a smaller monthly payment. If you're in need of a little more disposable income every month, refinancing for a lower rate may be to your benefit.
  • Borrowers can even look into switching from an ARM to a fixed-rate loan to lower their monthly payments. After the introductory period of an ARM, your interest rate may have risen drastically. With a fixed-rate loan, you'll always know what you owe month-to-month, giving you more peace of mind.
  • Some homeowners who find themselves in need of cash at short notice, choose to borrow cash against their home equity with a Cash-Out Refinance. Despite the additional, long term cost of a Cash-Out Refinance, it is a good opportunity for homeowners who need instant funds for renovations, bills, or emergencies, without having to sell their home.
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To qualify for an FHA Simple Refinance, borrowers must pass a credit qualification, which is the process of analyzing credit, income, and assets.
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FHA Loan Articles

Is it the Right Time for an FHA Refinance?

With historically low interest rates, the mortgage industry has seen a sharp uptick in refinances. Taking advantage of the current market might be in your best interest and could lower your monthly payment significantly. Don’t forget that refinancing a mortgage comes with closing costs.

FHA Programs for Fixer-Upper Homes

The fact is that repairs and renovations to your home cost a lot of money. Luckily, the FHA has an option for those with fixer-uppers on their hands. The FHA 203(k) Rehabilitation Mortgages allows borrowers to finance the funds for renovations to a home.

Streamline Your FHA Loan Refinance

With the trend of falling interest rates since 2019, the number of mortgage refinances around the country has spiked and continues to rise. Borrowers with FHA loans can also capitalize on the low rates, but it may be possible to simplify the process with the FHA Streamline Refinance.

Do I Need an FHA Refinance?

Borrowers can choose to refinance for several reasons, but it comes down to prioritizing different benefits. One homeowner may want the lowest possible monthly payment, while another might want the shortest possible term for their loan.

What Homebuyers Should Know About Appraisals

A key step in the mortgage process is the home appraisal. In the case of home purchase or refinance, this is a task that is almost always required by the lender, and it is important that potential homebuyers understand what, how, and why of a home appraisal.  

Homeowner's Insurance - Why Do We Need It?

When buying a home, you have a list of things you need to do. Get pre-approved, arrange for a home inspection, and a few other tasks. One important thing on that list is shopping for homeowner’s insurance.


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