If you’re a Fort Lauderdale homeowner with an FHA loan, you may be paying more than you need to each month, especially if you’re stuck with mortgage insurance you can’t get rid of. In 2025, refinancing into a conventional loan may be your best financial move to eliminate mortgage insurance payments.
With rising home values and evolving loan guidelines, many South Florida borrowers are now eligible to shed their FHA loans and switch to a better long-term solution. Here’s what you need to know.
Refinancing a mortgage can be a strategic financial move, offering benefits such as lower monthly payments, lower interest rates, and access to home equity. For homeowners with an existing FHA loan, refinancing options are available, including the FHA Streamline Refinance, FHA Cash-Out Refinance, and conventional loan refinancing. Understanding the refinancing process and options can help homeowners make informed decisions about their financial goals. Key terms to keep in mind when refinancing a mortgage include mortgage loan, refinancing options, interest rates, and new mortgage.
FHA loans are a type of mortgage loan insured by the Federal Housing Administration (FHA). They are popular among first-time homebuyers due to their lenient down payment and credit score requirements. However, FHA loans come with mortgage insurance premiums (MIP), which can add up over time. Refinancing an FHA loan to a conventional loan can be a good option to avoid these fees. Conventional loans are not insured by the FHA and do not require mortgage insurance premiums. To refinance an FHA loan to a conventional loan, homeowners must meet the conventional mortgage’s approval standards.
FHA loans are designed to help first-time buyers or borrowers with less-than-perfect credit enter the housing market. But those benefits often come with a long-term cost — mortgage insurance premiums (MIP) that don’t go away. Different refinancing methods, such as cash-out and cash-in refinances, can impact the loan balance by either increasing it through new funds or reducing it by making substantial payments.
By refinancing out of your FHA loan, you can:
FHA loans require ongoing monthly mortgage insurance, which can impact a homeowner's budget. For many Fort Lauderdale homeowners, refinancing isn’t just about saving money — it’s about taking control of their mortgage future.
👉 For a full breakdown of FHA vs. Conventional loans, read this guide.
Refinancing a mortgage can offer several benefits, including lower monthly payments, lower interest rates, and access to home equity. Homeowners can use a cash-out refinance to tap into their home’s equity and use the funds for debt consolidation, home renovations, or other major expenses. Refinancing can also help homeowners switch from an adjustable-rate mortgage to a fixed-rate loan, providing more predictable monthly payments. Additionally, refinancing can help homeowners eliminate mortgage insurance premiums, which can save them money over time.
Unless you put down more than 10% when you originally purchased your home, your FHA mortgage insurance is permanent for the life of the loan. That means even after years of payments, you’re still paying extra every month. Additionally, ongoing mortgage insurance costs can add up significantly over time, impacting your overall financing expenses.
With rising home values in Fort Lauderdale, there’s a good chance you’ve built up 20% or more in equity, which means you’re likely eligible to refinance into a conventional loan and drop MIP completely.
👉 Click here to check your equity and refinance eligibility.
To refinance from an FHA to a conventional loan in 2025, you’ll typically need to meet the following:
If you meet these qualifications, a refinance could eliminate your mortgage insurance and possibly lower your interest rate, or allow you to change your loan term. Additionally, you might consider switching to adjustable-rate loans, which can provide flexibility in your mortgage terms and potentially lower your monthly payments and interest rates.
A credit score plays a significant role in refinancing a mortgage. Homeowners with a lower credit score may face higher interest rates or stricter loan terms. However, some refinancing options, such as the FHA Streamline Refinance, do not require a credit check. To qualify for a conventional loan refinance, homeowners typically need a credit score of at least 620. Homeowners with a lower credit score may need to consider other refinancing options or work on improving their credit score before refinancing.
Over the past few years, Fort Lauderdale has seen consistent property appreciation. If you purchased your home with an FHA loan three or more years ago, you’ve likely built up significant equity — even without making extra payments.
This equity is key to refinancing. It’s what allows you to meet the 20% threshold and qualify for a conventional mortgage without PMI (Private Mortgage Insurance). Additionally, homeowners can leverage their home's equity through options like cash-out refinancing to access funds for personal projects or debt consolidation.
Not sure how much equity you’ve built up?👉 Start a free prequalification with Rate Leaf now.
If you’re planning major upgrades, paying off debt, or just want more financial flexibility, a cash-out refinance might be the right move. This allows you to:
A cash-out refi is particularly beneficial if you aim to borrow against your equity for purposes such as home improvements or debt consolidation.
Many South Florida homeowners are using cash-out refinances to invest in home improvements or consolidate high-interest credit card debt.
You can also learn more about how cash-out options compare to HELOCs in our related post: 👉 Florida Homeowners’ Guide to Cash-Out Refinancing & HELOCs
The refinancing process typically involves submitting a loan application and providing financial documentation, such as pay stubs, tax returns, and bank statements. Homeowners will also need to provide proof of homeowners' insurance and a clear title to the property. The loan officer will review the application and documentation to determine the homeowner’s eligibility for refinancing. The refinancing process can take several weeks to complete, and homeowners should be prepared to pay closing costs, which can range from 2% to 4% of the new loan amount. Key terms to keep in mind when refinancing a mortgage include loan application, financial documentation, and closing costs.
At Rate Leaf, we make the refinance process straightforward and stress-free. Here’s what it looks like:
It's important to consider the upfront closing costs associated with refinancing. If you plan to move within a few years, these costs may not be justified, as it could take time to reach the break-even point where savings outweigh the initial expenses.
We serve homeowners throughout Fort Lauderdale, Plantation, Coral Springs, and all of Broward County — with local expertise and personalized service.
👉 Get started now — prequalify in minutes.
Yes, if you want to eliminate mortgage insurance by switching to a conventional loan, you typically need at least 20% equity. We’ll help calculate your equity during the prequalification.
Additionally, it's important to consider the net tangible benefit requirement for refinancing. This means that borrowers must demonstrate that refinancing will provide meaningful financial advantages, such as reduced monthly payments or lower interest rates, before proceeding with the loan process.
You can still refinance, but you may need to pay private mortgage insurance (PMI) temporarily. We’ll advise whether it makes financial sense now or later.
For homeowners with lower credit scores, there are specific refinancing programs available, such as FHA and VA streamline refinances, which cater to those with lower credit scores, providing viable options to consider.
In most cases, yes — your new lender will require an appraisal to verify your home’s value before approving the refinance.
There are different types of FHA refinance options available, including streamlined processes and detailed eligibility criteria, each with its own benefits and requirements.
Generally, lenders prefer at least 6 months of mortgage payment history. However, if you’ve seen a significant increase in home value or improved your credit, you may qualify earlier.
The FHA streamline program offers a refinancing option with more lenient requirements, such as no need for an appraisal or credit check, making it beneficial for homeowners looking to lower mortgage payments or convert adjustable-rate mortgages to fixed-rate loans.
Most refinances close in 30–45 days, depending on your documentation and how quickly the appraisal is scheduled.
A rate and term refinance can be particularly beneficial for homeowners looking to improve their financial situation by lowering monthly payments, reducing interest rates, or transitioning between different loan types.
If you’re tired of paying FHA mortgage insurance and want more flexibility with your home loan, refinancing into a conventional loan could be the right step in 2025. Switching to a conventional home loan can lead to lower monthly mortgage insurance premiums and a reduced interest rate, especially if you have equity in your home.
Want to explore all your loan options before deciding? 👉 Check out our guide on different types of mortgage loans.
At Rate Leaf, we’ll walk you through your options, review your equity, and help you decide if now is the right time to ditch your FHA loan for good.
👉 Start your refinance prequalification now.
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