When Should You Get an FHA Streamline Refinance?
Making mortgage decisions can be tough. There are many variables and numerous factors involved, and making the right decision can seem complex and confusing. It helps to understand whether or not you are the ideal borrower for an FHA loan. With that in mind, let’s look at a few indicators that might demonstrate that you are an ideal candidate for an FHA Streamline Refinance.
You Meet All the Basic Requirements: This is the most obvious, but to be the ideal borrower for FHA Streamline Refinancing you need to meet all the basic requirements, including having an FHA mortgage on your home. For more information on this, see our “FHA Streamline Refinancing Requirements” section.
You Pay a High Interest Rate on Your Current Loan: One of the top benefits of refinancing is that you can get a new mortgage with a lower interest rate. If you have an FHA loan with a fixed rate that is high, you would be an ideal borrower for FHA Streamline Refinancing.
Your Current Payment is Too High: If you have payments that are too high, limiting your monthly income, extending the mortgage through FHA Streamline Refinancing may be beneficial. This program allows you to extend the terms, spreading the loan balance over more monthly payments.
You Don’t Need to Cash Out Your Home’s Equity: If you own equity in your home and need a fast injection of cash, FHA Streamline Refinancing would not be ideal, as this program does not allow for cash-out refinancing. If you do not need money from your equity, you may be ideal for this program.
You Need to Refinance, But Your Home’s Value Has Declined: Homeowners who need to refinance will often have to complete an appraisal. However, if the home has declined in value, which will be reflected in an appraisal, the refinanced loan may be rejected. Using the previous appraised value, FHA Streamline Refinancing allows for approval without an appraisal, so you may be ideal if you own a home that has gone down in value.
You Need to Refinance, But Your Credit Has Dropped: Like the appraisal, FHA Streamline Refinancing can be completed without a credit check. Other refinancing options may require that you submit credit information, which, if your score has dropped, could cause rejection. You can skip this step with FHA Streamline Refinancing.
You Are Not Close to Paying Off Your Current Loan: With all refinancing, if you are close to paying it off, it’s usually not worth it. Because of closing costs and other fees, it’s often better to ride out the rest of your loan. However, if you have roughly a decade or more left on your loan, and you align with some or all of the above factors, you may be an ideal homeowner for FHA Streamline Refinancing.
IF YOU’D LIKE TO LEARN MORE ABOUT FHA STREAMLINE REFINANCING, SIMPLY FILL OUT THE FORM BELOW AND A FRIENDLY FHA HOME LOAN SPECIALIST WILL GET IN TOUCH!