There are three basic types of FHA refinance loans, each catering to three basic types of borrowers.
This basic FHA refinance loan is open to anyone. You may apply for the traditional FHA Refinance Loan even if your original mortgage was not an FHA loan. The FHA refinance loan works exactly the same as a traditional refinancing loan, except your loan has the additional insurance provided by the Federal Housing Administration.
With a Cash Out Refinancing Loan, you apply for an amount greater than the current balance of your mortgage, so you can use the money left over for other things. If you have a good deal of equity in your home, you can use a Cash Out Refinancing Loan for other financial needs, like home improvement or college education. Your original mortgage must have been an FHA loan to qualify.
The FHA Streamlined Refinancing Loan is only for existing FHA loan holders who want a lower interest rate on their mortgage. If you do not have an existing FHA loan, you may not use the Streamlined Refinancing loan. If your original loan is an FHA loan, however, your lender can reuse most of the same paperwork from your initial FHA loan, so your refinancing loan can be processed much faster.