Streamline refinancing involves the refinance of an FHA mortgage. Since these mortgages are insured by the Federal Housing Administration it allows the investor to offer easier qualifying conditions than a standard mortgage. The underwriting and related documentation collection required by a lender is limited based on the FHA streamline loan product.
There are a few prerequisites to consider. In order to qualify for a streamline FHA mortgage, the mortgage must be FHA insured to start with. It also needs to be in good standing. A delinquent loan does not qualify for a streamline refinance. Further, the FHA streamline refinance must result in a “net tangible benefit to the borrower” meaning that the final outcome will benefit the borrower based on variables such as the type of loan, interest rates, fees, etc.
Why would you choose an FHA streamline refinance? This is a fast and easy way for someone with an existing FHA insured loan to refinance without a home appraisal or rigorous underwriting process. The FHA Streamline loan is a great way for borrowers to take advantage of lower interest rates and reduce their borrowing cost. An FHA streamline refinance is available with multiple amortization options most borrowers will choose between fifteen or thirty-year loans. Another characteristic of this loan that makes it easier to manage is that the qualification process is very easy. The requirements for employment income, credit and reserves are reduced to help people qualify for lower mortgage rates.
The bottom line is that even if you would not currently qualify for a traditional loan or a new FHA loan, you may be able to get an FHA streamline refinance to reduce your interest rate so that you can save money with a reduced borrowing cost. This benefits the FHA by putting people in a better position to pay off their loans with lower monthly payments. The FHA streamline refinance loan is a product that has helped many American homeowners reduce their monthly mortgage payments. Could you be the next to benefit from this program?