FHA Rate-and-Term Refinance
Most PopularBest For: Rate Reduction, Low Credit Scores, Easy Process
Reduce your interest rate, change your terms, or lower your mortgage insurance obligation with limited home equity and an easier process.
Program Description
The FHA Rate-and-Term Refinance loan is a great opportunity to lower your interest rate and monthly payment without having to meet some of the other requirements that a conventional product requires. New appraisal is required.
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FHA Rate-and-Term Refinance
Min. Credit Score
580
Min. Equity
2.25%
Max Loan Amount
$498,257 - $776,550
Qualification variables shown here are for 1-Unit Primary Residences, and loan amount ranges vary based on US County. Register Now to see if this loan program is a good fit for you, find your county limits, and find more options for purchasing a home.
Pros & Cons
- Reduce your current interest rate or loan term
- Lower your mortgage insurance obligation
- Ability to remove an original co-borrower
- Mortgage Insurance (MIP) is required for the life of the loan
- Property must meet all FHA eligibility requirements
- Cannot be used for borrowers in negative equity positions (short)
Program Availability
FHA Rate-and-Term Refinances are available in all 50 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands.
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“If you've gained enough equity in your current FHA home, qualify for a lower rate but not quite ready or able to take advantage of a conventional product, this is a great way to lower your monthly housing expense."
Occupancy & Property Types
Qualification factors for this program can vary based on how you intend to occupy the property and what type of property you are purchasing. By registering for a free account , you can check program limits for all property and occupancy types.
Occupancy Types
Available Property Types for Primary Residence
Income & Purchase Price Limits
Your Debt-to-Income Ratio (DTI), as well as purchase price and income limits, are important factors when qualifying for a home loan program. By registering for a free account , you can find the exact program limits for this program and others in your area and for your unique scenario.
Debt-to-Income Limit
50.00%
Purchase Price Limit
No Limits
Income Limit
No Limits
Qualification variables shown here are for 1-Unit Primary Residences, and loan limit ranges vary based on US County. Amounts may be rounded. Exact amounts can be accessed by registering for a free account.
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Key Features
- Only requires 2.25% equity in your home to qualify
- Current mortgage does not need to be an FHA loan
- Works with a variety of property types and borrower profiles
Additional Conditions
- 97.75% loan-to-value (LTV) maximum requires that the property has been owner-occupied for the previous 12 months
- Must be verified that the borrower has occupied the property as their primary residence via utility bills or employment documentation
- A new appraisal is required
Other Limitations
In some circumstances, there are specific requirements you must meet or homebuyer education courses you must attend in order to be eligible for the loan program.
No other program limitations
A Homebuyer Education Class is not required for this loan program.
Mortgage Insurance & Fees
Most mortgage programs require mortgage insurance when you are financing more than 80% of the purchase price or appraised value. Some programs may also have an associated funding fee, paid at the time of closing, or an annual fee. Learn all about the different fees here.
Required On All FHA Loans
Type: Annual Mortgage Insurance Premium (MIP)This FHA program requires the Annual Mortgage Insurance Premium (MIP) regardless of the amount of your down payment or home equity.
Type: FHA UFMIP
The FHA Up Front Mortgage Insurance Premium (UFMIP) is a one-time fee equal to 1.75% of your loan amount. This fee can either be paid at closing or financed into your loan amount.
Type: No Annual Fee
This program does not have an annual fee.
Estimated Closing Costs: 2.5%
These amounts are just an estimate. Your closing costs include things like loan origination fees, discount points, appraisal fees, title insurance, taxes, deed recording fees, and other charges.
Similar Loan Programs
If you think this home loan program may be a good fit for you, you may also want to check out the following programs that share many similarities with the current program.
FHA High-Balance Rate-and-Term Refinance
Best For: Large Loan Amounts, Easy Qualification
FHA refinancing above the standard FHA loan limit in high cost counties with easier qualification and typically lower rates than conventional.
Conventional Rate-and-Term Refinance
Best For: Flexible Terms, Rate Reduction, Easy Process
Popular refinancing option for loan amounts under the conforming loan limit. Flexible qualification and attractive benefits to qualified homeowners.
Related Resources
A Rundown On Closing Costs and How They Affect You
It can be tricky to sift through all the figures , so we broke down what they are, how much they cost, who's responsible and how to minimize your expenses.
Read More
High Balance FHA Loans Explained
Explore high balance FHA loans: low down payment, relaxed credit guidelines, and higher loan limits in high-cost areas. Ideal for first-time homebuyers.
Read MoreVisit our Mortgage Education Center for more resources.
* Some loan programs may not be offered by all featured lenders of ReviewMyMortgage.com and qualification guidelines may vary between them. Our team makes their best effort to keep loan program information up to date. Loan programs may change without warning. ReviewMyMortgage.com does not guarantee or offer any loan products. ReviewMyMortgage.com is strictly an educational resource hub for consumers
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