FHA Streamline Refinance - You may have heard of the "FHA streamline refinance" but you may not be exactly sure what it is. The FHA Streamline Refinance is an excellent feature that comes with every FHA loan. FHA Streamline Refinance is a rate reduction program for FHA mortgage borrowers.

If you already have a FHA loan and want to benefit from the current low interest rates then FHA streamline refinancing is the right choice for you. The borrowers original loan must be a Federal loan (insured) The principal and interest rate payments of the previous mortgage payment must be lowered by the FHA refinance The borrower must have had the mortgage for at least six months. Typically, your loan balance will stay the same but you may choose to finance some closing costs but your loan amount will never exceed your original loan balance. Some lenders offer "no cost" refinancing (no out-of-pocket expenses to the borrower) and will in exchange charge a higher interest rate on the new loan. As a result the borrower is charges a higher interest rate on the new loan.

For a normal refinance, you must qualify for the loan and provide all of your income, banking, credit, and liability information as well as an appraisal. If an FHA streamline refinance is done without a property appraisal, the new loan amount cannot exceed the original loan amount. The FHA streamline mortgage programs are considered to be the best as they have minimum paperwork and no hassles.

FHA loans have changed from what they were many years ago and are a great option even for people with excellent credit. With all the media attention currently being given to the subprime ‘fallout’ and the modernization of the FHA Home Loan program, more and more consumers will be introduced the more stable and financially sound options of financing their home with programs like the FHA.

 

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