refinance fha loan no pmi: smarter ways to cut costs

Main benefits

Homeowners with FHA loans often pay ongoing mortgage insurance. By refinancing into a conventional loan, qualified borrowers can remove monthly insurance-often called PMI-once they have at least 20% equity. The result can be a lower total payment, faster principal reduction, and more flexibility to recast or prepay. If rates have fallen, you might also secure a better rate and shorten your term without stretching your budget.

Who may qualify

Lenders typically look for 20% equity (80% LTV or better), a solid credit profile, steady income, and a clean 12‑month payment history. An appraisal usually verifies value. Remember, FHA’s insurance is MIP; removing it generally requires switching to a conventional loan.

Common mistakes to avoid

• Confusing FHA MIP with PMI; an FHA streamline won’t remove MIP.
• Ignoring closing costs and taxes-calculate a clear break‑even date.
• Skipping appraisal prep, leading to a lower value and higher LTV.
• Overlooking credit improvements that could earn better pricing.
• Taking cash out and accidentally pushing LTV above 80%.

Compare offers with and without points, review the APR, and ask for a written cost worksheet before you lock.