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The big advantage to an FHA streamline refinance is that you can skip the requirement for an appraisal.
But, in some cases, you may opt to get an appraisal on an FHA streamline. Why would someone choose to do this?
Check your FHA streamline refinance eligibility today (Oct 28th, 2026)
Can you wrap closing costs into the new loan?
Standard FHA streamline refinances do not allow the borrower to roll closing costs into the new FHA loan amount. The new loan is limited to your existing balance plus the interest and mortgage insurance premium due, and it can never be more than the original principal balance. FHA appraisals commonly run about $400 to $700, so skipping the appraisal saves hundreds of dollars. But you may have to pay closing costs out of pocket. That is, unless you receive a lender closing cost credit.
Getting an appraisal does not change that. A streamline does not use your home’s appraised value, and an appraisal does not raise the amount you can borrow.
If you want to wrap closing costs into the new loan, ask about a standard FHA rate-and-term refinance instead. It needs an appraisal and full credit approval, and it allows a loan of up to 97.75% of the appraised value for a home you have lived in as your primary residence for the past 12 months.
Keep in mind that FHA does not allow discount points to be wrapped into the new loan. If you choose to pay discount point, or the fees paid to reduce the interest rate below market rates, you’ll have to pay those out of pocket.
Before you order an appraisal, ask your lender what it would change. On a streamline, you will pay the appraisal bill and it will not raise your loan amount.
Check your FHA streamline refinance eligibility today (Oct 28th, 2026)
Your lender may require an appraisal
Another reason to order an appraisal is if your lender requires one. Each lender sets their own rules for how they lend, so they may have additional requirements above and beyond what FHA requires.
So why not just find another lender?
Well, a lender may offer slightly lower rates because of their less-risky, more conservative lending practices. If you have to spend $400 on an appraisal, for example, but get a rate that’s 0.25% better than another lender’s rate, you may come out ahead.
Just make sure there isn’t another lender out there that will give you a great rate and let you skip the appraisal.
Getting an appraisal on an FHA streamline might make sense
If you make an educated decision, you may find that an appraisal makes financial sense, for example if your lender requires one or you choose a standard rate-and-term refinance instead of a streamline. Compare the cost of the appraisal with what it gets you. Also check the mortgage insurance: the current FHA annual MIP is 0.55% for most 30-year loans (0.50% with 5% or more down), so compare your new payment, including MIP, with your old one.
Check your FHA streamline refinance eligibility today (Oct 28th, 2026)
