USDA Streamline Refinance
A Refinance for Those Who Love to Live in the Country Side of Life.
Are you living out in the boondocks or some kind of rural-based area, looking to streamline your USDA loan? Have no fear! Underdog is here (well..in spirit and health). Seriously, you have options. Rural areas have been hit the hardest in the housing market crash of 2008, and some need the extra assistance. Why don’t you add yourself to the list? Bypass all of the underwriting and close the loan within a few weeks of applying. Still unsure if you should take this lane in the fork of this road we call “refinancing?” Here are some key things to take note of on your journey.
Qualifying for a USDA Streamline
First and foremost, are you under a USDA Direct Home Loan or USDA Guaranteed Home Loan? This program is currently not available to all of the United States. Make sure your home is eligible for this because if not you’ll be wasting your time. Like most loans, the home you are refinancing must be your primary residence. You can always speak with a lender regarding residency requirements before refinancing. Make sure you also have 12 months of timely mortgage payments before you refinance.
Pros of USDA Streamline
Streamline is definitely the name of the game with this method! Worried about pesky credit reports and going through so much paperwork? Luckily, this is not the case with a USDA Streamline. Here are 3 things you don’t have to worry about when acquiring a USDA Streamline Refinance: no credit reports, no appraisals, and no home inspections required. Now, that saves you a lot of time and money (something we all wish would happen more often).
Inspections and appraisals are pricey depending on the number of times needed to check the condition of your home. Save that for a federal lender! A few other great things that make this loan accessible are the following factors: loan to value does not determine acceptance in this program, and mortgage rates from USDA are lower than FHA and conventional loans.
Cons of a USDA Streamline
Ever sing in the shower but when you heard it on a recording, you realized – “Wow, I can’t hold a note to save my life!” Well, it’s not that extreme here, but there is something in common. Not everyone can sing, and not everyone can acquire a USDA streamline refinance. The beta version of this program allotted 19 states to hold it. Most recently, 15 states were added. That still leaves about 1/3 of the country without this program. There’s a certain level of exclusivity that only certain rural and suburban places may be accepted into the program.
Although, mortgage insurance premiums have lowered, you still have to pay them (up front and annually). Don’t forget that you still have closing costs to think about. Since United States Department of Agriculture sponsors this refinance, you may have to pay for unique fees. For example, if you are a farmer, then you’ll pay for pest control. Why? Well, pests get into your product, and that’s a pretty risky pesky problem (no pun intended) to deal with on any level! Someone’s got to do it or you’ll pay for it (literally and figuratively).
Do your own research
Find out through the USDA site if your eligible for USDA streamline refinance. Talk to a lender about a possible strategy and how the rates will affect your mortgage. Always keep your options open and take your time. Making rash decisions without finding the pros and cons can lead you into debt. Even though this is one of the refinances that require the least amount of paperwork, you still need to be aware of fees and other things associated with this program.
USDA Streamline Refinance is a great option for homeowners who want to pass through some of the barricades without all of the paperwork. Take advantage of lowering your rate in the fast lane. However, make sure you can cover your insurance premiums and continue to make your payments on time.