FHA Refinance Rates Today
One of the attractive features of FHA loans is the opportunity to refinance into a new loan with lower rates and better terms. Whether you currently have an FHA loan or are looking to switch to one, FHA refinancing offers various loan options to fit your needs.
Current FHA Mortgage Rates
FHA loan rates change daily based on market conditions. See current FHA loan rates for each FHA loan type below.
| FHA Loan Type | Interest Rate | APR | Points |
|---|---|---|---|
| 30-Year Fixed FHA Cashout | 6.750% | 7.446% | 0.0000 ($0.00) |
| 15-Year Fixed FHA Cashout | 6.625% | 7.569% | 0.0000 ($0.00) |
| 30-Year Fixed FHA Simple | 6.625% | 7.347% | 0.2500 ($404.04) |
| 15-Year Fixed FHA Simple | 6.625% | 7.59% | 0.1250 ($202.02) |
| 30-Year Fixed FHA Streamline | 6.625% | 7.347% | 0.2500 ($404.04) |
| 15-Year Fixed FHA Streamline | 6.625% | 7.59% | 0.1250 ($202.02) |
Compare FHA Mortgage Rate Trends
One of the attractive features of FHA loans is the opportunity to refinance into a new loan with lower rates and better terms. Whether you currently have an FHA loan or are looking to switch to one, FHA refinancing offers various loan options to fit your needs.
FHA Streamline Refinance Rates
If you have an existing FHA loan, the FHA streamline refinance program can be an extremely beneficial option. This refinancing option allows you to refinance your current mortgage much quicker and with less paperwork compared to traditional refinancing.
Benefits of the FHA Streamline Refinance:
- Lower Interest Rates: Streamline refinancing often means securing a lower interest rate than your current loan, leading to potential monthly savings.
- Less Paperwork: With minimal documentation required, the process is faster and hassle-free.
- No Appraisal Needed: Say goodbye to the lengthy appraisal process—it's not required for streamline refinances. This also means that you get to avoid the FHA appraisal fee.
- Lower Monthly Payments: Many borrowers find that refinancing through this program results in more manageable monthly mortgage payments.
FHA Cash-Out Refinance Rates
If you want to tap into your home's equity, a FHA Cash-Out Refinance might be the answer. This option allows you to refinance your existing FHA loan while accessing cash that you can use for virtually any need, whether for home renovations or consolidating debt.
Benefits of FHA Cash-Out Refinancing:
- Access Cash: This refinance option lets you cash in on the equity you've built in your home, providing funds for major expenses.
- Potential for Better Rates: You might score a lower interest rate while simultaneously accessing that cash.
- Flexibility: The cash you receive can be used for various purposes, like education, emergency expenses, or home improvements.
Neighborly Advice
“FHA cash-outs are also used when refinancing other loan types into an FHA loan. You can also use this type of refinance if you don’t currently have any mortgage loan and own your home.” - Dan Bartelt
When Should You Get an FHA Refinance?
Seasoning requirements for FHA loans will differ depending on the type. For cash-out refinances, you need to have owned the home as your primary residence for at least 12 months, and have had 12 months of current payments.
For rate and term and streamline refinances, there is a minimum seasoning requirement of 210 days (just under 7 months). The refinance must also be financially beneficial, a necessary requirement to qualify. Meaning if rates haven't dropped enough since you acquired your mortgage and a lender determines that refinancing won't result in a net positive benefit, you won't be approved.
Lenders measure this by ensuring that you break even on your refinance. The break-even point refers to the point where the savings from your new mortgage cover the costs of refinancing. If you plan to stay in your home longer than the break-even period, refinancing could be a smart financial move.
Here are some additional signs that a FHA refinance might be a good idea:
- Interest Rates Have Decreased: If current mortgage rates have dropped significantly since you took out your loan, refinancing could save you a considerable amount on your monthly payments.
- You Want to Access Cash at a Low Rate: If you've built up equity in your home, a cash-out refinance can let you borrow against that equity at a lower interest rate than other financing options, like credit cards. Credit card rates are typically much higher, averaging between 15% and 25%, while cash-out refinance rates usually align with current mortgage rate trends.
- Your Credit Score Has Improved: If your credit score has risen since you took out your original loan, you may qualify for better rates or terms. However, an increase in credit score usually has to be paired with a recent drop in rates to make a significant enough impact to call for refinance.
5 Tips to Improve Your FHA Refinance Rate
Ready to score the best FHA refinance rate? Here are some handy tips to keep in mind:
- Boost Your Credit Score: Work on raising your credit score before refinancing. Pay down debts, make timely payments, and avoid new credit inquiries to help improve your chances of landing a lower rate.
- Increase Your Home Equity: If possible, wait until you have built up more equity in your home before refinancing. When you have more equity in your home, the loan amount you need relative to the property's value (the LTV ratio) is lower. Lenders view lower LTV ratios as less risky since you have more ownership in the home, reducing the chances of default.
- Compare Lenders: Don't settle for the first rate you see! Shop around and compare offers from different lenders to find the best deal for your financial goals.
- Consider Discount Points: If you can afford it, buying discount points upfront can lower your overall interest rate. A discount point is a fee you pay upfront to the lender at closing in exchange for a lower interest rate on your mortgage, with each point typically costing 1% of the loan amount.
- Review Your Financial Situation: Look closely at your finances and long-term goals before refinancing. Make sure it aligns with your overall financial strategy and that you can handle any associated costs.
Understanding FHA refinance rates and options can empower you to make informed financial decisions. If you have any questions or are ready to receive a personalized rate, feel free to reach out to a Neighbors Bank loan specialist.