FHA Streamline Refinance
For those borrowers with a current FHA loan, HUD offers two different refinance options which can be a great benefit, especially in times of lower interest rates and declining property values. They offer a traditional refinance in which the borrower has to qualify for the mortgage and the property must appraise for a value sufficient for the loan. However, HUD also offers a Streamline Refinance for borrowers with current FHA loans under certain circumstances which side-step these requirements and costs. If you have an FHA loan and have not been more than 30 days late more than 1 time in the last 12 months, you probably can qualify for the Streamline Refinance program if your rate is higher than the current interest rates. The lender compares your current payment to the new payment under the reduced rate and if your payment is being reduced, and you have been making your payments in a timely manner, then you can get a Streamline Refinance which can significantly lower monthly mortgage payments. The Streamline Refinance does not require income or credit qualification, it does not require a new appraisal and therefore, you do not have to worry if your home has not increased in value or whether or not your income has increased. HUD looks at your payment history and if you have been making your payments on time at a higher payment amount and they have already insured the loan, they feel it’s to your benefit and theirs to make the loan even more secure by making it even easier for you to make the payments at a lower payment amount. HUD also allows borrowers to utilize the Streamline Refinance program even if your payment is not reducing if it makes sense in other ways. For example, interest rates in December of 2008 are at almost historic lows. Borrowers who have adjustable rate mortgages may not have high payments now, but they remember when the rates they paid on those adjustable rates were higher due to higher interest rates on a fluctuating index. They know that if they were able to lock in the historic low rates of December 2008, they would be assured that their rate would never again rise to a point where they would be stressed to make their house payment. For this reason, HUD will allow a Streamline Refinance on an FHA loan in which the terms are significantly improved, even if the payment is not going down today. If you currently have an FHA loan and wish to see if you can reduce your monthly payment (often with little or no money out of pocket), give us a call TODAY! Call Toll Free (866) 705-8567 or complete our quick application |
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