Lower your Payment
Streamline refinance refers to the refinance of an existing FHA-insured mortgage requiring limited borrower credit documentation and underwriting. Streamline refinances are available under credit qualifying and non-credit qualifying options. “Streamline refinance” refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:
- The mortgage to be refinanced must already be FHA insured.
- The mortgage to be refinanced must be current (not delinquent).
- The refinance results in a net tangible benefit to the borrower. The definition of net tangible benefit varies based on the type of loan being refinanced, and the interest rate and/or term of the new loan.
- Cash in excess of $500 may not be taken out on mortgages refinanced using the streamline refinance process.
We offer streamline refinances in several ways. We offer “no cost” refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction. FHA does not allow lenders to include closing costs in the new mortgage amount of a streamline refinance. Investment properties (properties which the borrower does not occupy as his or her principal residence) may only be refinanced without an appraisal.
- Lower your interest rate– this is the most common reason to refinance your home with a FHA Streamline. When you bought your home, or refinanced your home last, there may be lower interest rates available compared to what you currently have. Do you know if you have the lowest interest rate?
- Remove PMI– many homeowners who bought their homes in the past 5 years bought a home with less than 20% therefore they have Private Mortgage Insurance also known as PMI. PMI is very expensive and is NOT tax deductible. If you are one of these homeowners and have at least 10% of equity in your home now, you should seriously consider refinancing to remove your PMI. This will lower your monthly payment significantly.
- Fix your ARM– that may sound funny but those that are paying higher payments aren’t laughing. Many people who bought a home with an Adjustable Rate Mortgage, also known as an ARM, have had rate adjustments. This means that the originally rate that you had is no longer fixed and can go up every six months. If this is your situation, you should refinance into a fixed rate mortgage to stop the bleeding.
- Stretch out your loan– if you bought your home many years ago and your payment has gotten tight due to retirement our lack of income, one way to save money is to re-amortize your loan. By refinancing your loan, your monthly payment will go down.
These are great ways to save money. We are experts when it comes to lowering your payment. If we feel like your loan is better than what we can offer, we’ll let you know. Call us or apply today to see how we can save you money!