When someone sees the word “streamline” next to refinance, they think all they need to do is call the lender and their rate will be reduced. Well, it’s not quite that easy.
A FHA Streamline refinance applies if you have a FHA mortgage and want to refinance into another FHA mortgage. What you may first want to do is see if you can qualify for a conventional loan first, which may result in a lower payment. But, if not, you can apply for the FHA Streamline refinance.
In order to qualify, the mortgage to be refinanced must be current and result in a net tangible benefit to you. 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. You cannot receive cash back in excess of $500 on a streamlined refinanced.
Lenders may offer a streamline refinance as a “no cost” refinance. This means there is no out-of-pocket expense to you. However, a higher interest rate is usually charged and the costs are paid out of the higher premium. You cannot include closing costs in the new streamlined loan.
If you are interested in a streamline refinance, please contact us and we can counsel you.
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