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FHA Streamline Refinance: How to Get One and What You Need to Know

Maurie Backman
By: Maurie Backman

Our Mortgages Expert

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Refinancing your mortgage is a good way to lower your interest rate on your home loan and reduce your monthly payments. And if you have an FHA mortgage, it pays to learn more about the FHA streamline refinance program.

What is the FHA streamline program?

The FHA streamline refinance program lets you quickly refinance an existing FHA loan. When you refinance a mortgage, you swap your existing loan for a new one with better terms. The goal of refinancing is to lower your monthly payment and/or shorten the length of your mortgage repayment period. When FHA mortgage rates are low, look into a streamline refinance.

How the FHA streamline works

The FHA streamline refinance program allows anyone who's current on an FHA mortgage to refinance to a loan with a lower interest rate. The best part: You won't have to go through the home appraisal process again. An appraisal means your home is assessed to verify its market value. But a streamline refinance skips that time-consuming step. It allows you to complete your refinance quickly and start enjoying savings sooner.

How to qualify for an FHA streamline refinance program

If your FHA loan is current (meaning, you're not behind on any payments) and at least six months old, you can apply for an FHA streamline refinance. There are two types of FHA streamline refinance -- credit qualifying and non-credit qualifying. 

With a credit-qualifying streamline refinance, your lender will check your credit score as well as your debt-to-income ratio. With a non-credit qualifying FHA streamline refinance, those steps will be waived. However, with a credit-qualifying streamline refinance, you may qualify for a lower interest rate. It could be worth having your lender take those extra steps if your credit score is strong and your debt-to-income ratio is low.

How to get an FHA streamline refinance

You must have an existing FHA mortgage to qualify for an FHA streamline refinance. From there, you can reach out to your current lender as well as other FHA lenders to shop around for refinance rates. Each FHA lender sets its own rates as well as closing costs, so it's important to gather a few different offers. Also, lenders may have different standards with regard to credit score requirements and existing debt. Shop around and compare your options.

How much does an FHA streamline refinance cost?

With an FHA streamline refinance, you'll pay an upfront mortgage insurance premium of 1.75% of your loan amount. The only exception is if your FHA home loan was put into place before April 2009. In that case, your upfront premium is much lower -- just 0.01%. 

You may be able to roll your initial mortgage insurance premium into your loan and pay it off over time. On top of that premium, you may be liable for other closing costs, like loan origination and recording fees that vary by lender. You won't be able to roll these other costs into your loan.

FHA streamline guidelines

The rules for an FHA streamline refinance are pretty simple:

  • You can't be delinquent on your current FHA loan
  • You can't do a cash-out refinance
  • Your existing mortgage must be at least six months old
  • Your streamline refinance must result in a shorter loan term, a lower mortgage interest rate, or both

Refinancing is a great way to make your mortgage more affordable, and the FHA streamline refinance program can help you get a new FHA mortgage quickly. It pays to contact different mortgage lenders about the FHA streamline program so you can get the best possible deal.

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