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In addition to providing low down payment fiancing for purchasing your next home, FHA mortgage programs can meet a variety of refinancing needs. Here are five ways an FHA refinance mortgage can help you.

5 Reasons for Refinancing with an FHA Home Loan

Getting an FHA refinance mortgage may be easier than qualifying for a conventional mortgage refinance under current tight credit requirements. FHA offers refinancing options for borrowers who already have FHA loans and for those wishing to refinance to an FHA mortgage.

FHA Loans: Refinance from FHA or Conventional Mortgages

FHA offers refinancing options for borrowers with conventional loans as well as FHA mortgages.

  • Streamline refinancing assists borrowers with existing FHA loans and provides approval with less documentation.
  • Borrowers facing credit and income challenges may qualify for an FHA refinance mortgage. FHA does not rely on credit scores alone for preliminary loan approval, and allows borrowers to qualify at higher rations of debt to income than conventional loan programs.
  • Lost home value can keep homeowners from refinancing to current low mortgage rates. Conventional mortgage lenders today require at least 20% home equity for refinancing; if your home equity has fallen below 20% of your home's current value, check into FHA refinancing.
  • Borrowers of age 62 and above may qualify for an FHA-insured reverse mortgage loan that converts home equity into tax-free income. Homeowners wishing to rehab their homes may qualify for an FHA loan based on projected home value after improvements are made. FHA offers cash-out refinancing and rate-and-term refinancing for reducing mortgage rates.
  • A delayed benefit of FHA refinancing is assumability. Most conventional mortgage lenders to not allow mortgages to be assumed by anyone buying your home. An FHA home loan is fully assumable by qualified buyers. This can improve your home's appeal to buyers, particularly if your FHA mortgage rate is lower than prevailing mortgage rates.

Contact your current mortgage lender or FHA-approved lenders to learn more about FHA refinancing and how it can help you.


Karen Lawson
Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.