Getting a refinance done on your home can be a great way to make your monthly mortgage more manageable while at the same time saving you a lot of money. If you’d like to save some money then you’ve probably done a little research on the world of refinances. More than likely you’ve heard about the streamline and how much simpler it is for homeowners and now you’re wondering will the FHA refinance my home with a streamline?
Streamline Refinance Qualifications
Before you can even attempt to get approval on a streamline you have to meet the very basic qualifications that have been set up. First and foremost, you must have an existing FHA loan. The streamline refinance is only for homeowner’s who are already working with and have loans through federally approved lenders. Homeowners with conventional loans will have to go through other means to get a refinance.
In addition to having a loan through a federally approved lender, you also have to have owned the home for at least six months. For most homeowner’s this requirement isn’t really going to be a problem. A second requirement, however, is that you live in the home. Again, this shouldn’t be a problem because your standard 203b loan that you get through the federal lenders has a requirement that the home be your primary residence.
When you go and ask a lender the question ‘will FHA refinance my home?’ he’s going to want to know what your financial snapshot is. In order to qualify for the streamline your snapshot needs to show that you are a reliable homeowner. So this means that you have to have made all of your mortgage payments for the last twelve months on time and in full. It’s important to show that your mortgage payment is a priority to you and that the payments will be coming in on time.
How Expensive is it to Have FHA Refinance My Home?
If you’ve met the qualifying requirements for a streamline refinance you can now start looking into the streamline process and the expenses that come with it. While a streamline refinance is a much easier way to get the adjusted home mortgage you are looking for, it is not free. In fact, it’s not even cheap.
Like all refinances you will have to pay the fees that come with it. The streamline requires less paperwork and you won’t have to do a home appraisal, but you will have to pay the lender fees and you will have to pay closing costs. Keep in mind that if you choose not to do a home appraisal you will not be able to get a refinance for a larger amount than the loan you currently have. It has to be the same amount or smaller.
On a typical refinance the closing costs that you’re going to have to pay will be anywhere from 3% to 6% of the loan amount. This amounts to thousands of dollars that you have to fork over from somewhere. Don’t let this discourage you though. If you don’t have the cash on hand, you may be able to get a ‘no-cost’ streamline refinance, which simply means that you will roll the closing costs into the final loan balance and pay it off over time. Bear in mind that if you choose this option you may have a higher interest rate.
Because the costs and fees can be so expensive with a refinance, it’s wise to shop around a bit before you settle with a lender. When you’re asking a lender to have ‘FHA refinance my home’ you will have to make sure you are first of all working with a federal lender. For the streamline, don’t attempt to get quotes from conventional lenders. They will be of no help to you. Instead, find several federally approved lenders and compare the quotes you get from them. Make sure you look at the interest rate, the closing costs, the amortization schedule, and the overall cost of the loan, then compare it to your current loan. If the bottom line is improved by the refinance, then you’ll want to go ahead and finish the process.
The streamline refinance isn’t something you can use to pull out the equity in your home or to make the investment of your home work for you. It’s there for you to take advantage of lower interest rates and to make your home mortgage easier to handle. That being said, many homeowners have been able to benefit from the streamline. Maybe it’s time for you to determine whether you will be the next?