Many first time home buyer's ask "What is an FHA Loan?" without ever getting a clear concise answer, we'll give that to you
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FHA Streamlined Refinance
The FHA does permit streamlined refinances on insured mortgages. The
term "streamline" refers to the amount of documentation and underwriting
that needs to be performed by the lender, and does not mean that there
are no costs involved in the transaction.
The requirements for a FHA streamlined refinance are:
- The mortgage to be refinanced must already be an FHA
insured mortgage.
- The mortgage must be current, with no late payments
in the last 12 months.
- The refinance must result in a lowering of the
borrower's monthly payments.
- Cash out refinances are not allowed under the FHA
streamlined program.
- Borrower should be aware of the significant
difference between "no cost" (Lender pays fees but
charges you a noticeably higher interest rate) and "no
out-of-pocket cost"(cost added to your new loan).
REFINANCE: FHA Streamlined Refinance Basics
This refinance option is considered streamlined since it allows you
to lower the rate of interest on your current property mortgage loan
quickly and frequently without an appraisal. FHA Streamlined Refinancing
also reduces the amount of paperwork that needs to be filled out by your
mortgage lender, saving you precious time and money.
To qualify for a Streamlined Refinance your original home mortgage
loan must be an FHA mortgage loan in good standing and the refinance
needs to lower your monthly interest payments. Refinancing with this
option reduces your monthly expenses by lowering your mortgage payments,
also keep in mind that doing a cash-out is not an option with the FHA
Streamlined Refinance. This works well for borrowers who are in good
financial standing without any substantial debt since it permits you to
have a little additional money each month that can be put to good use
elsewhere.