FHA Mortgages

FHA Refi Mortgage Guidelines You Want To Know


Are you thinking about refinancing your home loan? An FHA mortgage allows you to refinance a conventional, VA, or other non-FHA mortgage, as well as an existing FHA home loan.

Refinance is great for many reasons, but for some borrowers, a refi loan is especially important to get a more affordable mortgage with lower payments or a lower interest rate.

Some need to refinance to catch up on a mortgage after missing payments; Some may need to consider a refinancing option to prevent default and foreclosure on their home in such cases.

For our purposes, we’re not discussing the FHA’s refinancing options here as these loans have rules that dictate how much equity is required in the home to pay off and some borrowers may have to wait longer to refinance if they haven’t made enough mortgage payments to bring their equity up to a level that can be approved for the loan.

Non-payable refinancing options for FHA mortgages include rate and term based refinancing (including conventional to FHA refi, FHA to FHA, etc.) FHA Streamline refinances with ratings and FHA Streamline refinances without ratings.

For FHA refinance loans with interest and maturity terms, borrowers should know that their mortgage must be current in the month due for credit approval.

The HUD’s official website states, “If the property was purchased less than a year before the loan application and is not already FHA insured, the property’s original sale price must also be taken into account when determining the maximum mortgage.”

For FHA Streamline Refinancing with an Appraisal, it is important to understand that the loan must not be overdue, the loan MUST be an existing FHA mortgage, and the loan must be of tangible benefit to the borrower.

These general guidelines apply to all Streamline refinance loans, although there may be provisions for those who have participated in a loan forbearance program (see below).

FHA Streamline Loans are refinancing that, as mentioned above, can be offered with or without an appraisal. The same applies to a new credit check. In some cases your lender can do a credit check and in other cases it may be required.

For all FHA Streamline refinancing options (with or without expert opinion, with or without a new credit check) the following must apply (on the day the FHA case number is assigned) according to HUD.gov:

  • The borrower must have made at least six payments on the FHA-insured mortgage that is being refinanced;
  • In cases where the FHA mortgage has been modified, the borrower must make at least six payments under the agreement before applying for refinance;
  • At least six months must have passed since the first maturity of the mortgage to be refinanced;
  • The reference date of the mortgage to be refinanced must be at least 210 days ago.

In cases where an FHA loan has been taken on, there are six payments to be made under the loan takeover agreement.

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