Loans provided by the Federal Housing Administration often come with great rates and benefits. However, many existing FHA customers could refinance their loan and save even more! With a new process aimed at quick approval, the FHA has come out with a great refinancing product. This week, Stonebriar Mortgage teaches Dallas, TX and California homeowners about the benefits of FHA Streamline Refinancing.
How FHA Streamline Refinancing Works
The process of FHA Streamline Refinancing works by eliminating much of the paperwork and appraisals that are often required to refinance a loan. Certain eligibility requirements must be met. For example, you should be current on your loan payments over the last 12 months. Decent credit will also improve your odds; you will likely have this if you are in good standing on a current FHA Mortgage.
The process is so easy. Some people can even apply right over the phone, without needing professional assistance. Use caution, as you will create a new loan in the process. Ensure that the new debt-to-income ratio is something you can handle.
How to Qualify for FHA Streamline Refinancing
If you are looking to save money on your current FHA Loan payments, and are in good standing, the process to qualify for streamlining is easy. Here are some of the eligibility requirements:
- Your current mortgage must be FHA-insured; a conventional loan will not qualify for the streamline procedures.
- You must be current on your payment history and have had the FHA mortgage for at least 210 days.
- Lenders may disqualify you if you have been delinquent on payments, however, some will overlook this if your mortgage is newer and the payment was under 30 days late.
- Lenders like to see a benefit to applying for streamlining. Examples of a benefit include the ability to make payments more easily or to reduce the term of the loan. In addition, the new interest rate should be lower.
- Many say that the new interest rate, Mortgage Insurance, and principle payments may not exceed the existing mortgage by more than $50.
Although you cannot cash-out from this refinancing option, many say the cash you save on payments is just the same as a cash-out refinance. In addition, lenders are not allowed to include closing costs in the mortgage under a streamline process. We have shared general FHA guidelines in this week’s blog post. Please note that different lenders may have updated their procedures and processes.
Stonebriar Mortgage will help you and your family work through the process of refinancing your loan. We have experience working with Dallas, TX or California customers to reap the many benefits of the FHA Streamline Refinance. Contact our friendly staff with questions today!