If you want to take out an FHA loan, and you’ve had a derogatory credit event, such as a bankruptcy, foreclosure, pre-foreclosure, deed-in-lieu of foreclosure, short sale, or mortgage charge-off occur within the few years, you may have to wait a bit before becoming eligible for FHA financing. Each type of event has its own waiting period, which is designed to protect both the FHA and the lender from the risk of taking on a borrower who may be likely to default on their loan.
If you want to refinance your home with the FHA Streamline Refinance program, can you purchase mortgage points in order to reduce your interest rate? The answer is yes. Many FHA Streamline Refinance borrowers decide to reduce their interest rates with mortgage points. Typically, one point will cost one percent of the amount of the loan, and will usually reduce the borrower’s interest rate by 0.25%.
One of the most attractive aspects of the FHA Streamline Refinance program is the fact that it technically does not require credit verification. This means there is no minimum credit score for FHA loans. However, lenders may have different credit requirements; just because the FHA doesn’t check your credit score doesn’t mean that a lender won’t.