Refinancing an FHA Loan To a Conventional Loan

This guide will cover refinancing an FHA loan to a conventional loan. Refinancing an FHA to a conventional loan with GCA Forums Mortgage Group has advantages. The mortgage economy can change in your favor when refinancing an FHA loan to a conventional loan. Refinancing can reduce your monthly mortgage payments and eliminate expensive mortgage insurance, among other benefits. Dale Elenteny of GCA Mortgage Group says the following about refinancing an FHA loan to a conventional loan:

At GCA Forums Mortgage Group, an arm of Gustan Cho Associates, we walk clients through the steps of refinancing to ensure they achieve their chromatic goals. With over 210 wholesale lenders at our disposal and a team of licensed professionals, it’s clear why GCA Forums Mortgage Group is the leading option for homeowners who want to streamline their mortgage by refinancing an FHA to a conventional one.

This guide explains all the required steps, including detailing the terms of the refinancing process, eligibility conditions, and why other lenders fundamentally lose out. Suppose you want to increase your home equity, lower your interest rate, or shorten the duration of your loan term. In that case, there is no better place to be backed by industry-leading Gustan Cho Associates on every prevailing loan term. The following paragraphs will cover refinancing an FHA loan to a conventional loan.

Refinancing an FHA Loan to a Conventional Loan

First-time homebuyers often favor FHA loans due to low down payments (3.5 percent) and accommodating credit score requirements (580 for maximum financing). However, FHA loans require mortgage insurance premiums, including upfront and annual MIP. These fees substantially undermine the loan’s affordability in the long run. John Strange, a senior mortgage loan originator at GCA Forums Mortgage Group, says the following about refinancing an FHA loan to a conventional loan:

On the other hand, conventionally issued loans, which Fannie Mae and Freddie Mac back, have stricter credit score criteria (typically 620 and above) and higher down payments (3% for qualified borrowers) but offer greater flexibility in addition to the possibility of avoiding mortgage insurance when there is sufficient equity in the home.

Refinancing involves replacing your existing FHA mortgage with a new conventional one that offers better terms, lower costs, and more closely aligns with your financial needs. GCA Forums Mortgage Group uses its extensive network to find each client the best possible rates and terms. Refinancing an FHA loan to a conventional loan has multiple advantages, making it appealing to many homeowners. One of the primary benefits of refinancing an FHA loan to a conventional loan includes the possibility of eliminating mortgage insurance or at least significantly reducing it. Conventional loans permit you to avoid private mortgage insurance (PMI) if a borrower has at least 20% equity. However, FHA loans necessitate MIP for the duration of the loan, regardless of equity, which is mostly true. Even below the 20% threshold, PMI on conventional loans is typically cheaper than FHA’s MIP.

Benefits of Refinancing an FHA Loan to a Conventional Loan

Additionally, PMI can be canceled once the borrower reaches 20% equity, thus reducing monthly payments. If you took out your FHA loan and improved your credit score or the market rates dropped, you might save thousands over the life of the loan with a lower monthly payment after refinancing to a conventional one, given the current market rate. Unlike FHA loans, conventional loans permit cash-out refinancing, allowing you to access home equity for debt consolidation, renovations, or other purposes, with loan-to-value (LTV) ratios as high as 80-85%, compared to the 80% limit set by FHA. Marga Jurilla, the executive assistant to Gustan Cho, NMLS 873293, says the following about refinancing an FHA loan to a conventional loan.

Moreover, traditional loans come with flexible timeframes like 15, 20, or 30 years. This enables you to pay off the mortgage faster or extend the term to reduce payments. For high-value properties, jumbo and conventional loans offer larger sums than FHA loans, which have set limits per county.

Eligible applicants may use the simplified HomeReady by Fannie Mae or Home Possible by Freddie Mac with low down payment requirements. Refinancing generally removes MIP, lowers rates, and frees up tens of thousands of dollars, which can be put toward other spending goals. We at GCA Forums Mortgage Group have made refinancing an FHA loan to a conventional loan easy and efficient. As our first step, self-evaluation is crucial. Do you want to get rid of MIP, access equity, lower your interest rate, or change the length of your loan? Our loan officers look over your potential savings and explain your objectives.

Refinancing an FHA Loan to a Conventional Loan: Eligibility Requirements

Followed by an eligibility check. Typically, eligibility requires a credit score of 620 or higher, a debt-to-income (DTI) ratio lower than 45% (50% in some instances), and equity of at least 3-20%, depending on PMI requirements. An appraisal might be needed to confirm the home valuation. You will start collecting relevant documents, which include proof of income, such as pay stubs, W-2s, tax returns, asset statements, and information about your current FHA loan. Based on your financial profile, our team negotiates mortgage terms like fixed-rate or adjustable-rate loans with over 210 wholesale lenders. Alex Carlucci, a senior mortgage loan originator at GCA Forums Mortgage Group, says the following about refinancing an FHA loan to a conventional loan:

After approval, borrowers sign the new loan agreements, where closing costs, 2-5% of the loan amount, are often rolled into the loan or offset through lender credits. GCA Forums Mortgage Group offers rush closing, where eligible borrowers can close in two weeks. Clients nationwide receive tailored support.

Refinancing will require you to restrict yourself to some eligibility requirements that Forums Mortgage Group has waived. Usually, a primary credit score of 620 will be needed under conventional loans, and anything above 740 will get you lower interest rates. In simpler terms, to avoid PMI, you must possess an equity of at least 20%. However, certain programs do allow refinancing with 3-5% equity. Your debt-to-income ratio should be below 45%; some lenders will push it to 50% if you have strong credit. Two years of income documentation must be submitted, such as returns and proof of employment. It seems that it needs to be submitted. Generally, the maximum loan-to-value ratio for cash-out refinances is 80-85%.

Refinancing an FHA Loan to a Conventional Loan: Loan-to-Value Requirements

In comparison, certain programs may allow a 97% LTV on rate-and-term refinances. Most lenders will not permit you to refinance your FHA loan until after you have held it for 6-12 months. Here at GCA Forums Mortgage Group, we leverage our non-QM and alternative financing expertise to help over 80% of clients qualify even when bankrupt or foreclosed, where traditional lenders wouldn’t help. Dustin Dumestre, an associate contributing editor at Great Content Authority Forums, says the following about refinancing an FHA loan to a conventional loan:

GCA Forums Mortgage Group, which Gustan Cho Associates has power over, ranks among the elites in mortgage refinancing due to its unmatched servicing and expertise. Our network has more than 210 wholesale lenders, so we offer conventionally tailored loans to suit your requirements.

Over 80% of our clients with credit issues, high DTI ratios, or non-traditional income streams are serviced and assisted with overcoming these obstacles, demonstrating our specialization in complex cases. Our services span 48 states, including Washington, DC, Puerto Rico, and the U.S. Virgin Islands, allowing us to serve clients nationwide. Loan officers are on call every day of the week, including evenings and holidays, providing responsive support. Cho Gustan (NMLS 873293), the National Managing Director, supervises a team with proven records, testified to by numerous clients commending our professionalism alongside swift loan closing processes.

Mortgage Process of Refinancing an FHA Loan to a Conventional Loan

The frequently asked questions section captures refinancing most accurately. Conventional loans allow refinancing with less than 20% equity through certain conventional loan programs. However, PMI will be necessary until you reach 20% equity. Removing FHA MIP can save $100-$300 or more per month, depending on the loan size, and personalized cost analyses are available. With conventional loans at 80-85% LTV, cash-out refinancing is possible, and equity can be accessed for other reasons. Our rush closing option allows selected eligible borrowers to close in as little as two weeks. Still, standard closings are usually done in 30-45 days.

Ready to reclaim your FHA loan and transition it into a conventional loan? GCA Forums Mortgage Group can assist you in the process, help you save money, and help you work towards your financial goals. Give us a ring at 800-900-8569, text us to respond faster, or email gcho@gustancho.com. For tailored suggestions from our professionals, fill out the application at gustancho.com. Through our specialists and dedication, we have made refinancing simple. © 2025 GCA Forums Mortgage Group, a Subsidiary of Gustan Cho Associates. All Rights Reserved. Branch NMLS 2315275: Corporate NMLS1657322.