FHA Streamline Refinance
FHA Streamline Refinancing is making it possible for millions of Americans to refinance their home mortgages to a low fixed rate with less paperwork and no headache...
FHA Streamline Refinancing - Quick Facts
- You must currently have an FHA loan to Streamline
- There is less paperwork to deal with in a Streamline Refinance
- FHA streamline closing costs are lower than a traditional refinance
- You can get a low rate around 5.00% fixed
- You do not need perfect credit to Streamline Refinance
- FHA Streamline allows you to refi with no appraisal and reduced documentation
- FHA streamlines require you to pay the closing costs outside of the loan proceeds
Streamlines are an excellent way to refinance your property, obtain a lower rate and reduce your monthly expenses. The process is simple. First of all, you must have an FHA loan currently. If you do, then you should remember that you paid somewhere between 1.5% - 2.25% Up Front Mortgage Insurance Premium (UFMIP) originally when you financed the loan. That money is technically calculated over a 60 month period. What this means is that if you are refinancing within the first 5 years of your loan - a Pro Rated portion of the "Unused" UFMIP will be refunded to offset the cost of the new "UFMIP" premium for taking out the new loan.
It is important to know that you cannot "build" the closing costs into the new loan. You can only borrow the principal amount of money owed currently reducing your interest rate on your current principle mortgage balance. While the costs associated with an FHA streamline refi are typically lower than those of a conventional FHA refinance, the closing costs in a streamline refinance must be paid by the borrower at closing and can not be included into the loan.
A streamline refinance is a great way to save money on the common costs associated with a refinance transaction. You should calculate how much money you are saving monthly to determine how long it will take you to recover the money you are laying out to get the lower rate. If your intention is to stay in the property and you are breaking even with in a reasonable amount of time, then this option may be the best for you to take advantage of.