Mortgage Refinance for FHA Loans

Homeowners refinance mortgages for a variety of reasons. Most often, they want to lower their monthly payment, get a better interest rate, shorten the length of their loan or cash out equity. Refinancing for a shorter term may increase your monthly mortgage payment, but it can also help you build equity in your home that much faster. There are a number of FHA refinance loans available in Texas for rate and term refinance transactions:

FHA Refinance Loans Available in Texas

Conventional Refi: You refinance your existing FHA or conventional mortgage with a conventional loan that lowers your interest rate, monthly payment, or length of the loan. These loans are best suited for homeowners looking to remove the MIP (mortgage insurance premium) on their current FHA loan.

FHA Refi: Commonly used to lower your rate and monthly payment, several different types of these loans are available:

  • Conventional to FHA loans allow homeowners to borrow up to 97.75% of loan-to-value on FHA refinance loans. They’re also used to convert adjustable rate mortgages (ARMs) to fixed-rate loans.
  • Non-Streamline FHA to FHA refinance loans, also known as “regular FHA refi” transactions, can be used to lower your interest rate, term and/or monthly payment.
  • Streamline FHA refinance loans are available to existing FHA mortgage holders only and are often used to reduce the MIP payment. They simplify the home refinancing process by waiving one or more of the typical documentation that banks require, including: employment verification, a home appraisal and/or bank account and credit score verifications. The guidelines for FHA refinance in Texas change often. AMCAP loan specialists will help you obtain the most recent terms and rates.

    All streamlined FHA refinance loans in Texas require that you, as the homeowner, are current on the mortgage you want to refinance. Keep in mind you are not permitted to carry or roll-in the closing costs of the original loan to your new mortgage. All closing costs must be paid upfront at the time of settlement. Only non-streamlined or regular FHA refinance loans permit closing costs to be rolled into the new loan.

VA Refi: Offered by the Veterans Administration, these loans help lower the interest rate currently being paid on an existing VA mortgage.

IRRRLs, or interest rate reduction refinance loans, lower your current interest rate or convert an adjustable rate mortgage (ARM) to a fixed-rate one. They must be a VA to VA refinance and a borrower need only certify that she or he previously occupied the home. An IRRRL permits you to roll the closing costs into the new loan. The amount of the loan depends on a cap set by the VA. These loan limits vary by county. There is a VA funding fee, which can be waived for any one of these reasons:

  • A veteran receives disability benefits or compensation for a service-related or connected disability.
  • A veteran is entitled to receive compensation for a service-related disability if he or she did not receive retirement or active duty pay.
  • A surviving spouse of a veteran who died in service, or from a service-related disability.

USDA Refi: Guaranteed by the U.S. Department of Agriculture, these loans can be used to refinance an existing USDA loan. The main purpose of these fixed-rate loans is to lower your current mortgage’s interest rate, which will also lower your payment. If you do not currently have an existing USDA loan, you cannot refinance to one. The basic requirements for this type of loan are:

  • The existing mortgage must be current and not delinquent.
  • The proposed P&I monthly payment must be lower than your current USDA mortgage.

You are not permitted to take a cash out using the USDA refinance program. A full appraisal of the property is required and all closing costs and the guarantee fee may be included in the loan amount. Keep in mind, though, that the appraised value may only exceed by as much as the guarantee fee itself.

Finally, there are what’s known as “cash-out” refinance home equity loans. In Texas, these loans are also referred to as “Texas cash out” or “Agency cash out” mortgages. An AMCAP loan specialist can tell you more.

Let’s Get Moving on Your FHA Refinance in Texas

You can move one step closer to your dream of owning a home by getting pre-qualified for a loan. Pre-qualification lets you know just how much you can borrow. For more information on an FHA refinance in Texas or how to pre-qualify, call us today at 281-860-2533, or fill out the form.

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