The FHA Streamline refinance provides individuals with an easy way to refinance their home. Certain stipulations must be adhered to, but for those who qualify for this process, it is the best route to take. The streamline process allows for a mortgage to be refinanced quickly and with less expense than a traditional mortgage refinancing. The FHA has permitted the use of a streamline refinance on insured mortgages since the 1980's and yet today many people do not realize what this can offer to them.
What Is It?
In an FHA Streamline Refinance, the documentation and underwriting that is needed to refinance the loan is reduced significantly.
This allows the process to be faster and it allows people to move from one loan into another without the hassles usually attributed to the process. It is important to note that there are some costs involved in the process, but they are generally much lower than the costs traditionally attributed to the process of refinancing.
In order to qualify for the FHA Streamline Refinance, individuals must meet specific criteria.
1. The mortgage you currently have must already be an FHA insured mortgages. If you are unsure of this, contact your lender directly and ask if your mortgage is an FHA loan. This simply means that the FHA is insuring the loan by the lender to reduce the amount of risk.
2. In order to use an FHA Streamline Refinance, the mortgage you currently have must be current. If your mortgage is currently delinquent, the lenders may offer solutions to help you to get caught up on the loan payments prior to agreeing to a refinance of this type.
3. No cash may be taken out of the mortgage that is refinanced. If you wish to pull equity out of your home loan, you will need to use another type of refinance loan to accomplish this.
4. The goal of this refinance should be to reduce your monthly principal and interest payments.
As you can see, the requirements for obtaining an FHA Streamline Refinance are quite low. Most lenders are happy to allow you to refinance, especially if it would make paying your loan easier for you.
There are several reasons to consider the benefit of using this refinance process. You may qualify for a loan with a lower interest rate or better terms. This may allow to have a much lower monthly payment. With interest rates as low as they currently are, it is a good time to consider refinancing if your interest rate is currently higher than what is being offered.
Individuals who are interested in an FHA Streamline Refinance can take full advantage of this service. The process of obtaining this type of loan is not difficult but it can save you thousands of dollars over the lifetime of your loan, even if you simply reduce your interest rate by a percent or less.
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