BLOWNMORTGAGE.COM LENDER HOTLINE: 888-581-5008 Refinancing today is very popular, thanks to some of the lowest rates that have been seen in years. Some borrowers want to know if they can refinance into an FHA loan or if they can refinance if they currently have an FHA loan. The answer to both questions is yes, as long as certain requirements are met. An FHA refinance is not strictly reserved for those borrowers that have an FHA loan, although it is a little easier for them to go through the process because they could qualify for the Streamlined Refinance. Those with a conventional loan or those that have an FHA loan that would like to get cash-out of their equity can still take advantage of FHA’s low rates, with a few simple stipulations. Streamline Refinance The simplest refinance is FHA’s Streamline program. This is reserved strictly for those that have an FHA loan and that are current on their payments. You will not have to submit any new paperwork and your credit will not be pulled again. The FHA also does not require a new appraisal, although your lender could decide to require it if the values in your area have significantly dropped. The main premise behind the Streamline Refinance is to provide you with a lower monthly payment. Cash-Out Refinance Contrary to popular belief, the FHA does offer cash-out refinances. It must be for current FHA customers, however. There are also certain stipulations that must be met including a maximum loan-to-value ratio of 85 percent. This percent could be lowered for those loans that are higher than $417,000 or are seasoned for less than 12 months. Every loan must have at least 12 payments made on time. The standard debt-to-income ratio of 31/43 must be adhered to – if the ratios are higher, compensating factors must be in place, which are up to the discretion of the lender. Conventional to FHA Refinance In some cases, a conventional mortgage holder might want to refinance into an FHA loan. This could be the case for borrowers that have lower than average credit scores or do not have large amounts of equity in the home. FHA loans do offer lower rates than would be provided on a conventional loan for circumstances that are less than ideal. In many cases this could save you a point or two on your interest rate, which would allow you to lower your monthly payment and pay down your interest faster. It is not typically ideal to refinance from a conventional loan to an FHA loan due to the mortgage insurance premiums charged by the FHA, but if it helps you to lower your payment, it could be worth it for you.

1. WHO CAN
REFINANCE
INTO AN FHA
LOAN?
BLOWNMORTGAGE.COM
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

2. Refinancing today is
very popular, thanks to
some of the lowest
rates that have been
seen in years.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

3. Some borrowers want to know if
they can refinance into an FHA loan
or if they can refinance if they
currently have an FHA loan. The
answer to both questions is yes, as
long as certain requirements are
met.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

4. An FHA refinance is not strictly reserved for
those borrowers that have an FHA loan,
although it is a little easier for them to go
through the process because they could qualify
for the Streamlined Refinance. Those with a
conventional loan or those that have an FHA
loan that would like to get cash-out of their
equity can still take advantage of FHA’s low
rates, with a few simple stipulations.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

5. Streamline Refinance
The simplest refinance is FHA’s Streamline program.
This is reserved strictly for those that have an FHA
loan and that are current on their payments. You will
not have to submit any new paperwork and your
credit will not be pulled again. The FHA also does not
require a new appraisal, although your lender could
decide to require it if the values in your area have
significantly dropped. The main premise behind the
Streamline Refinance is to provide you with a lower
monthly payment.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

6. Cash-Out Refinance
Contrary to popular belief, the FHA does offer cash-out
refinances. It must be for current FHA customers,
however. There are also certain stipulations that must
be met including a maximum loan-to-value ratio of 85
percent. This percent could be lowered for those loans
that are higher than $417,000 or are seasoned for less
than 12 months. Every loan must have at least 12
payments made on time. The standard debt-to-income
ratio of 31/43 must be adhered to – if the ratios are
higher, compensating factors must be in place, which
are up to the discretion of the lender.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

7. Conventional to FHA Refinance
In some cases, a conventional mortgage holder might want
to refinance into an FHA loan. This could be the case for
borrowers that have lower than average credit scores or do
not have large amounts of equity in the home. FHA loans do
offer lower rates than would be provided on a conventional
loan for circumstances that are less than ideal. In many
cases this could save you a point or two on your interest rate,
which would allow you to lower your monthly payment and
pay down your interest faster. It is not typically ideal to
refinance from a conventional loan to an FHA loan due to the
mortgage insurance premiums charged by the FHA, but if it
helps you to lower your payment, it could be worth it for you.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

8. There are many benefits of refinancing into an FHA
loan, including the ability to keep your closing costs to
a minimum. If you are refinancing your loan from an
FHA loan into another FHA loan, it is possible to avoid
pulling your credit and obtaining an appraisal, both of
which could save you a significant amount of money at
closing. This could also serve to save time during the
refinance process, which can span several months
when the entire process needs to be completed,
including an appraisal.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

9. If you are trying to save money on your monthly
mortgage payments and are already in an FHA loan or
have extenuating circumstances that exclude you from
refinancing into a conventional loan or will cause very
high interest rates on your conventional loan, it is
worth looking into an FHA loan to see what you qualify
for; you might be surprised at how much money you
can save over the span of 30 years.
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

10. T O L E A R N M O R E
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008
C L IC K HE R E
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

11. Justin McHood is Americas Mortgage
Commentator and has been providing
Mortgage commentary for over 10 years.
INFORMATION PROVIDED BY:
JUSTIN MCHOOD
MORTGAGE COMMENTATOR
Information Originally Published:January 1, 2015
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12. LEARN MORE ABOUT
MORTGAGE COMMENTATOR:
MORTGAGECOMMENTATOR.COM
FACEBOOK.COM/MORTGAGECOMMENTATOR
@MORTGAGECOM_
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