If you're interested in finding a way to reduce your bills by refinancing a mortgage, you might want to look into the FHA streamline process. The program is available to people who have existing FHA-insured mortgages, and there are options available for folks who are credit and non-credit qualified. Even if you don't currently have an FHA-insured loan, there may still be a path into the program for you.
Anyone seeking an FHA streamline needs to be current on all mortgage payments made within the last year. They have to have owned the property in question for a minimum of six months, and they also need to have maintained an existing FHA loan for at least six months.
Some borrowers who are carrying large amounts of debt or have poor FICO scores may be asked to justify their loan approvals. The lender will establish things like equity appraisal requirements before moving forward with the process of setting up a loan.
The primary advantage of an FHA streamline loan is lower overall costs. Interest rates may be lower, the process is expedited, and attached fees tend to be cheaper. If you're worried about potential closing costs, you can also fold those into the loan. You may be able to refinance a 30-year loan down into a 15-year one too.
In some cases, owners may even be able to cash out of their existing mortgages and take the proceeds by accepting a bigger loan. Cash-outs are capped at $417,000, although the appraised value of a property will also factor into the actual maximum amount allowed. An appraisal is always required before seeking a cash-out.
If you're looking to do improvements to your residence, the FHA Streamline 203K Loan is designed to make that possible. These loans are often chosen by people who intend to purchase fixer-upper homes. Within the 203K program, you can fund the purchase of a house and also acquire up to $35,000 in order to handle repairs and cosmetic problems.
Changing into an FHA Loan
If you're not currently on any type of FHA loan, you may still be able to follow a process of swapping into the streamline program. You'll have to take on an FHA loan, and then you'll have to maintain that loan in accordance with the previously stated requirements. Once you hit the eligibility requirements, you may then apply for a full streamline refinance.Share