If you are a homeowner looking to refinance, there are several options available to you. Over the last few weeks, we’ve discussed VA streamline refinance home loans but now we are pleased to move on to another refinancing option, the FHA Streamline Refinance. This type of refinancing offers many benefits to FHA home loan participants and is a good option for quick and effective refinancing.
What is a FHA Streamline Refinance?
An FHA streamline refinance loan is a home refinancing option that has been put into place to help homeowners receive lower monthly payments for their mortgage through lower and locked interest rates. The process is much quicker than conventional refinancing due to less paperwork and no need for home appraisal. With less paperwork and no home appraisal needed, homeowners can refinance quickly while saving both time and money.
How to Qualify
Homeowners can only receive a streamline refinance if they already are making payments on a current FHA mortgage loan that is in good standings. Unlike refinancing options for VA loans, a streamlined FHA refinancing can only be used to secure lower interest rates and lower monthly home mortgage payments. There are a few more considerations in qualifying for a FHA streamline refinance and those requirements are:
- All Mortgage payments must have been made on time over the past year.
- The property being refinanced must have been owned by you, the homeowner, for at least 6 months leading up to the streamline refinance.
- The FHA refinance loan cannot exceed the current FHA home loan.
- You must be using the home as your principal residence.
- The closing costs will need to be paid upfront unless you opt for an appraisal FHA streamline loan, in which case your home will need to be appraised and the assessed equity will go towards the extra amount of closing costs.
- You must use an FHA approved lender to help in the FHA streamline refinancing process.
How Does a FHA Streamline Loan Benefit Me?
It has been touched upon above but a FHA streamline refinancing loan works for you as a homeowner by helping you have a lower monthly mortgage payment and interest rate. The streamline process reduces the amount of time and paperwork required for a refinance meaning you can refinance and begin making lower monthly payments towards your home as soon as possible.
What If I Don’t Have an FHA Home Loan But Want to Refinance Into One?
It is impossible to refinance with an FHA streamline refinance loan unless you are already making payments to an FHA mortgage. You can, however, refinance conventionally with a previous non-FHA home loan or you can apply for an FHA refinancing home loan. Each process will include the usual home purchasing processing and paperwork, therefore will not be streamlined.
Are There Different Types of FHA Streamline Refinancing?
There are two types of FHA streamline refinance loans. The first is a typical streamline refinancing loan for FHA mortgages which we’ve discussed above. The second is called a FHA Streamline 203(k) Loan. A FHA Streamline 203(k) Loan is strictly for home improvements on a home with an FHA mortgage and has a limit of $35,000, among other contractor and home improvement specifications.
FHA Streamline Refinance
If you are a homeowner looking to refinance through the option of FHA Streamline Refinance, we hope you found this article helpful. There are many benefits to you, as a homeowner, in refinancing with a quick and easy FHA Streamline Refinance. If you have any questions or would like to get started on making lower monthly mortgage payments today be sure to give us a call.
*Loan subject to credit approval. Restrictions apply. Rates subject to change at any time.