Who Should Consider an FHA Streamline Refinance 15-Year Fixed Mortgage?

Published March 29, 2022

Homeowners seeking FHA streamline refinance 15-year fixed mortgages can access benefits beyond what a traditional refinance can provide. If you’re considering different FHA refinancing options, you’re likely weighing a handful of factors. You know you can secure a good deal with a new FHA loan, and you’ll have access to low 15-year interest rates. Importantly, an FHA streamline refinance offers distinct benefits. You’ll likely save time and money, and, unlike other refinancing options, an FHA streamline refinance does not require a home appraisal. 

From the borrower’s perspective, FHA streamline refinances are among the least complicated refinance options. You might find yourself attracted to doing an FHA streamline refinance 15-year fixed-rate mortgage for various reasons. Key benefits can include the following. 

• No appraisal fees

• You can have access to refinancing options even if your home’s value has declined

• You’ll be able to refinance as a retiree or while you are unemployed

• You will be able to refinance despite having a lower credit score

• You can refinance even with an elevated debt-to-income ratio

• You may be able to lower or eliminate your existing private mortgage insurance (PMI)

Evaluate your current loan before you decide that an FHA streamline refinance is the best way to proceed. An FHA streamline refinance may make your process easier. 

What is an FHA streamline refinance?

Getting an FHA streamline refinance 15-year fixed mortgage means that you are replacing your existing loan with a new FHA loan. Unlike when you took out your first mortgage, you will not need to provide significant documentation to get an FHA streamline refinance. Additionally, you do not have to refinance with your original lender. If you’re interested in working with American Financing, we can help regardless of with whom you took out your original loan. 

There are two types of FHA streamline refinance options. Homeowners can secure either credit-qualifying, or non-credit-qualifying refinances. You will not need to arrange for a home appraisal in either option. However, you’ll need to meet some specific requirements to obtain a credit-qualifying FHA streamline refinance 15-year fixed mortgage. In this option, your lender must review your credit score and credit history. You must also demonstrate the ability to repay the loan. 

If you’re interested in refinancing, we recommend you familiarize yourself with other FHA refinance options, such as a simple FHA refinance. This ensures you choose the best financial product for your situation. If you’re curious to learn more about these specific FHA refinance strategies, get in touch. We can explain how each could work for your home. In the meantime, here are some crucial differences between streamline and simple FHA refinancing. 

A simple FHA refinance:

• Allows you to maintain low, out-of-pocket costs

• May help you secure lower interest rates with available home equity

A streamline refinance:

• Benefits a homeowner whose home value has not risen significantly

• Allows you to avoid incurring closing costs onto your principal if you plan to sell soon

Who qualifies for a streamline refinance?

Streamline refinances have few requirements when it comes to borrower credit, documentation, and underwriting. Homeowners can elect for an FHA streamline refinance on their primary, secondary, or non-owner-occupied residences. However, you’ll need to meet specific qualifications before you can refinance an existing FHA-insured mortgage. 

The borrower’s qualifications to satisfy an FHA streamline refinance 15-year fixed mortgage include:

• Being current on your mortgage

• Making all mortgage payments due in the previous six months (with a limited grace period)

• Waiting approximately seven months after your existing FHA loan’s closing date

• The loan financially benefits you by shortening your term, reducing your mortgage and FHA insurance premium’s combined rate, or switching from an ARM to a fixed-rate loan

• Your new loan not exceeding 30 years

• Your new loan not adding more than 12 years onto the repayment period

• Cash at closing not surpassing $500

If you still have questions about whether you qualify for a streamline refinance, schedule an appointment with one of our mortgage consultants. We can help by answering any of your remaining questions or introducing you to the best loan programs for your financial goals.

Why is a 15-year mortgage good for an FHA mortgage holder?

An FHA streamline refinance 15-year fixed plan benefits FHA mortgage holders in a few ways. First, borrowers who choose a 15-year loan can become eligible for lower interest rates. Every time you make a mortgage check payment, you will have paid more of your principal loan balance. Despite higher monthly payments, you will pay off your mortgage faster with a 15-year version of the FHA mortgage. You will also save money over the entire loan’s lifetime. Consider whether you are concerned with saving money for short-term investments. If that is not a top priority, a 15-year mortgage can benefit you as an FHA mortgage holder.

15-year fixed mortgage vs. ARM options

Deciding whether to get an FHA streamline refinance 15-year fixed mortgage takes time. Along with deciding between an FHA streamline or simple refinance, homeowners should consider whether it makes sense to refinance from an adjustable-rate mortgage to a fixed-rate mortgage. A 15/15 ARM is an increasingly common type of mortgage that might benefit you as an FHA loan holder. 

Despite its name, a 15/15 ARM is a 30-year mortgage. It works so that the interest rate stays fixed for the first 15 years. The mortgage rate then adjusts and remains at that new rate for the remainder of the loan’s life.

Speaking with a mortgage consultant is the best way to decide whether a fixed-rate mortgage refinance or an ARM will best serve you in your financial endeavors. You may feel more compelled to select an ARM if you are looking for short-term competitive rates, but an FHA streamline refinance 15-year fixed mortgage may make more sense after surveying the full scope of your finances. Whatever your decision, the best choice is the one that meets your needs.