FHA loans come in a variety of types designed to fit different financial needs. First consider whether you're trying to lower your monthly mortgage payments, take cash out for other uses, or shorten your loan term. Then start narrowing down your options.
Let's talk about interest rates. Think about whether an adjustable rate mortgage, one where the initial rate is lower than it will be later on, will help you save money during the early years of the loan. And if you plan on selling the house before the rate adjustment kicks in, this loan might be right for you. Otherwise, the fixed rate mortgage will give you a steady principal and interest payment through the live of the loan.
The FHA streamline refinance simplifies the loan approval process if you already have an FHA loan. Streamlines let you avoid the appraisal and since your payment is going to be lower you do not have the same qualifying guidelines. If you need access to cash for paying bills, sending a child to college, or renovating your home, then an FHA cash-out refinance can make that happen for you. Your loan balance will be higher since the cash you're taking out is added to your previous mortgage balance and you will have to fully qualify.