Does an FHA Streamline Refinance get rid of PMI? No, the FHA Streamline Refinance does not eliminate mortgage insurance. Refinanced FHA loans still have the FHA's annual mortgage insurance, as well as a new upfront mortgage insurance fee equal to 1.75 percent of the loan amount.

What is the catch with streamline refinance?

The FHA Streamline Refinance is a simplified way for FHA borrowers to get lower rates and smaller monthly payments. The catch is that not every FHA borrower qualifies — and sometimes you can do better refinancing with another loan program.

Does PMI reset when you refinance?

If you are already paying PMI under your current loan, this will not make a big difference to you. However, some homeowners whose homes have decreased in value since the purchase date may discover that if they refinance their mortgage, they will have to pay PMI for the first time.