March 17, 2019

Vimeo Channel YouTube Channel

When Should I Refinance With An FHA Mortgage?

When Should I Refinance With An FHA Mortgage?

When should I refinance with an FHA mortgage? That is a question many home owners face, especially if their financial plans have changed from the ones the borrower had when closing the original mortgage.

Do you know if it is a good time to refinance? If you need lower payments or interest rates, and are credit-qualified to receive those lower rates, it may be the right time to explore your options.

FHA Refinancing For Borrowers In Adjustable Rate Mortgages

Some FHA borrowers buy a home with an adjustable rate loan, either thinking they will sell before the introductory rate ends (or before the rates are adjusted beyond a certain threshold) or refinance the loan at some later date. FHA ARM loan adjustments may be more conservative than some conventional loan equivalents-how do your lender’s options add up?

If you have left the introductory rate phase of the adjustable rate mortgage and wish to get into a fixed rate FHA mortgage, that is possible for qualified borrowers. Applicants must pass both a new credit check and have a new appraisal.

Your FICO scores and credit history may play a determining role in what rates you are offered going forward. It’s best to treat this kind of refinance loan exactly as you would the new purchase mortgage.

Give yourself plenty of time to check out your credit scores, get your financial affairs in order, and apply for the refi loan with more confidence.

Refinance Loans For Adjustable Rate Mortgages (FHA ARM loans) To A New FHA ARM Loan

This option is technically available under FHA loan rules-it is possible to refinance ARM-to-ARM. However, just because FHA loan rules permit this does not mean all participating FHA lenders offer the option. If you are thinking of an ARM-to-ARM FHA refinance loan, talk to your participating lender to see what is possible at that financial institution.

Remember, FHA loan rules, lender requirements, state law, and other ordinances all may have a say in your transaction depending on circumstances. Now may be a good time for a review of your ARM-to-ARM refinancing choices.

FHA Refinancing For Borrowers Who Don’t Need A Cash-Out Refi

Some automatically associate FHA refinance loans with cash-out refinances. Non-FHA loans can be refinanced using cash-out refinancing but they can also be refinanced as FHA mortgages without cash back to the borrower. It is true that a new credit check and appraisal are required anyway, but for those wanting to keep things more simple and get into a different type of mortgage with a potentially lower interest rate, FHA no cash-out refinancing is a good option.

FHA Refinancing For Rehab Work

Some borrowers mistakenly believe the FHA 203(k) rehab loan program is specifically for new purchase loans, but 203(k) rehab loans can be processed as refinance loan transactions, too. Talk to your loan officer about what it takes to successfully apply for an FHA 203(k) rehab loan; know in advance that you may be required to use a 203(k) consultant and have your rehab/repair program approved by the lender.

Joe Wallace - Staff Writer

By Joe Wallace

March 13, 2018

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

Connect with Joe:


Browse by Date:

About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

5850 San Felipe Suite #500, Houston, TX 77057 281-398-6111. is privately funded and is not a government agency.

Share This