fha streamline refinance closing costs explained for practical budgeting

What these fees cover

With an FHA Streamline, you skip most income docs and often no appraisal is needed, but you’ll still see closing costs. Typical charges include lender and underwriting fees, title and settlement services, recording taxes, prepaid interest, new escrow deposits, and the upfront mortgage insurance premium (UFMIP). Depending on market and state rules, totals commonly land around 1%–3% of the loan amount, though they can be higher.

Ways to handle the costs

Unlike some refinances, you generally cannot roll regular fees into the new principal; only UFMIP may be financed. Many borrowers use cash at closing or request a lender credit by accepting a slightly higher rate. If your current FHA loan is recent, you might receive a partial UFMIP refund, which can offset expenses.

Smart steps before you lock

• Request a detailed loan estimate and compare at least two lenders.
• Ask for both par-rate and lender-credit quotes to see the tradeoff.
• Check state transfer and recording taxes that can swing totals.
• Calculate your break-even: savings versus costs and timeline.
• Confirm seasoning, payment history, and net tangible benefit rules.