Is a “Streamline Refinance” the Right Solution for You?
In order to allow borrowers with and existing FHA loan an easier option to refinance, the agency has updated their streamline program to provide assistance. If you are one of these homeowners, you might find this is a great way to get your mortgage refinanced with a minimum of expense and hassle. This includes eliminating a new appraisal.
The need for a streamlined refinance program does cut down on the necessary documentation and underwriting required by a lender, it is still a transaction that has certain qualifiers and costs. However, some lenders have developed ways to minimize the out-of-pocket expenses to refinance.
Find Out the Special Considerations for Streamline Refinance
While you should visit with a qualified lending professional who keeps track of such programs and any changes to it, the basics of your being eligible for a streamline refinance are:
- Your mortgage must already be insured by the FHA.
- You must be current on your loan payments.
- The refinancing, when completed, must lower your total monthly payments for principal and interest.
- In some circumstances, you can use the program to convert an adjustable rate mortgage, or ARM, to one with a fixed rate.
- Additional requirements may apply.
If your financial situation has changed and you need or wish to lower your monthly payments, you may find this potential for a streamline refinance is a great financial tool for that purpose.
HUD has prepared a detailed handbook that explains the program, but you can also get a great overview by visiting with an approved lender. If you are strapped for cash and can’t pay for the costs of a refinance, your lender may charge a higher interest rate and cover those costs themselves.
While the FHA does not allow a lender to roll closing costs into your new streamline mortgage, the added interest costs cover those expenses during the life of the loan. Questions? Contact Paramount Equity today.