How FHA Streamline Refinancing Can Help Save You Money
FHA Streamline Refinance Loans for Existing FHA Mortgages
Streamline Refinance loans have no FHA-required appraisal, and no FHA-required credit check. That is a very important factor to consider as cash-out refinancing always requires both, and most other refinance loans will too.
Features of the FHA Streamline Refinance loan include a requirement that FHA Streamline loans refinance existing FHA mortgages only; you can’t refinance a conventional loan into an FHA Streamline.
FHA Streamline Refinance loans also allow an add-on to the loan called the FHA Energy-Efficient Mortgage which provides extra loan funds for approved energy-saving improvements to the home. This should not be confused with a cash-back-to-the-borrower situation as the funds for the improvements are strictly regulated, but the improvements you make with those funds could save you more money over time.
A Tangible Benefit to the Borrower Is Required
FHA Streamline loans must result in one or more of the following outcomes for the borrower in most cases--one of the following must normally apply as the result of the Streamline refi:
- The borrower must get a lower interest rate OR;
- The new loan must feature lower monthly payments OR;
- The borrower must be refinancing out of an adjustable rate mortgage and into a fixed-rate FHA loan.
When planning to apply for an FHA Streamline Refinance loan, keep in mind that you should not come to the application process with late or missed mortgage payments; if you are in trouble on your loan ask your mortgage servicer to provide you with all the options you are eligible for to help get back on track with the loan.
Borrowers who have fallen behind on mortgage loan payments should discuss their situation with the loan servicer as soon as possible; FHA Streamline Refinancing may or may not be a solution for you depending on circumstances, but it’s key to know your options. You may be eligible for loan modification, forbearance, or other options.
If you do not need help catching up with missed mortgage payments, remember that it’s considered best to fill out a credit application with at least 12 months of on-time, every-time payments on your financial obligations; anything less can potentially ruin your chances for loan approval.
Sometimes It Pays to Refinance
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