July 24, 2017
Where can I refinance an FHA loan? We’ve been exploring FHA refinance topics in recent blog posts, and this common question is definitely an important one. Why? Because depending on your refinance needs, you may need to shop around for a lender who will offer the type of loan best for your financial goals and needs.
FHA refinance loans for existing FHA mortgages are sometimes referred to as “FHA-to-FHA refinancing”, which simply means that you’re going from one FHA loan to another. One misconception about refinance loans is that you would need to stay with the original lender in order to refi FHA-to-FHA, but this is not true.
You are free to shop around for a new participating FHA lender to refinance your mortgage. You are also free to explore some other refinance loan options that may be open to you if your participating lender offers such loans.
One good example? FHA adjustable rate mortgages (ARM loans). If you have an existing FHA ARM, FHA loan rules offer lenders the option to let you refinance into either a new ARM loan or to get out of the adjustable rate and into an FHA fixed rate mortgage. Moving into a fixed rate loan definitely has its’ advantages.
But there are questions to ask yourself before choosing an adjustable rate mortgage or continuing to pay on one. Do you plan to stay in the home long-term? Or are you hoping to sell the property and move elsewhere?
Some believe that FHA ARM loans make good sense if you are not planning to keep your home for the full term of the loan, but rather sell it at some point down the line.
Not all participating lenders will offer an FHA ARM loan, so if you’re looking to refinance into one or want to refinance into a new ARM loan from your current ARM, you’ll need to insure your chosen financial institution can help you.
Again, you do not have to stay with the original FHA lender in order to refinance FHA to FHA. If your current lender isn’t able to help you, shop around for a new participating lender and get the help you need elsewhere.
Refinancing fixed-rate to fixed rate may seem easier to do, but if you want add-ons to your loan like an FHA Energy Efficient Mortgage (which allows to cost of approved energy-efficient upgrades to the home to be rolled into the new loan), you’ll need to discuss those with your loan officer to make sure you qualify and that the add-ons are supported by that lender.
Remember, both FHA-to-FHA refinance loans and conventional-to-FHA are possible, so there are plenty of options for those who don’t currently have an FHA mortgage but want to consider refinancing into one.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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