What are the advantages of refinancing to a fixed rate FHA mortgage?

There are advantages to refinancing to an FHA mortgage with a fixed interest rate, particularly if you currently have a higher cost mortgage or have a mortgage that has an adjustable or a variable interest rate, optional payments or interest only payments that will increase in the near future.

Borrowers with adjustable rate mortgages or interest only payment mortgages often encounter much higher monthly payments after having the mortgage for just a few years.

FHA does not provide direct financing nor does it set the interest rates on the mortgages it insures. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders.

An FHA fixed interest rate mortgage may be used to refinance a new or existing 1-4 family home, a condominium unit or a manufactured housing unit (provided the manufactured housing unit is on a permanent foundation).

You can find additional information on FHA mortgages by going to:

You can find an FHA approved lender in your area by going to: https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist

You may also wish to contact a HUD approved housing counseling agency in your area for unbiased counseling on your particular situation. You can:

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-03187