Core Insights - Refinancing a mortgage can serve multiple financial objectives beyond just lowering interest rates, particularly for homeowners with FHA loans [1][2] FHA Refinance Overview - Homeowners may refinance FHA loans to lower monthly payments, shorten loan terms, pay for home improvements, switch loan types, or consolidate high-interest debt [2][12] - FHA refinance loans include options like Streamline, Simple, Cash-out, and 203(k) loans, each catering to different borrower needs [6][9][12][17] FHA Refinance Requirements - Minimum credit score for FHA loans is typically 580, with some lenders requiring higher scores; debt-to-income ratio should be 43% or less [4] - Closing costs for FHA refinancing range from 2% to 6% of the loan amount, and mortgage insurance is mandatory [5][20][21] Types of FHA Refinance Loans - **FHA Streamline Refinance**: Best for current FHA borrowers wanting to refinance without appraisal or credit checks; requires six months of on-time payments [6][8] - **FHA Simple Refinance**: Allows borrowers to avoid upfront closing costs and requires a home appraisal; also requires six months of timely payments [9][10] - **FHA Cash-out Refinance**: Suitable for borrowers with at least 20% equity in their home, allowing them to take cash out while keeping the loan under 80% of home value [12][13] - **FHA 203(k) Loan Refinance**: Designed for borrowers looking to renovate their homes, combining renovation costs into the new loan balance [17][18] Specific Loan Requirements - FHA Streamline Refinance requires existing FHA mortgage and timely payments [8] - FHA Simple Refinance requires appraisal and allows closing costs to be wrapped into the loan [10] - FHA Cash-out Refinance requires a minimum credit score of 580 and a tangible benefit from refinancing [15][16] - FHA 203(k) loans have specific project financing rules and require an appraisal [18][23]