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.
The FHA Streamline Refinance is perhaps the fastest and most efficient way to refinance your FHA home loan. However, it’s not the only refinancing option available from the FHA; the Federal Housing Administration also insures another type of refinance loan, the FHA Simple Refinance. Like the Streamline Refinance, the FHA Simple Refinance is only available for current FHA home loan borrowers. However, unlike the FHA Streamline program, Simple Refinancing does require all borrowers to get a home appraisal. In this article, we’ll review more of the similarities and differences of these two FHA refinancing programs in order to help you decide which choice best fits your individual needs.
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%.
If you currently have a 30-year FHA mortgage, can you use the FHA Streamline Refinance program to refinance into a 15-year mortgage loan? The answer is no. Unfortunately, the Streamline Refinance program only permits borrowers to refinance into a loan that is the same term or a longer term.
Are FHA Streamline Refinance loans assumable? The answer is yes. Just like other forms of FHA financing, FHA Streamline Refinance loans are fully assumable. However, borrowers typically need to get approved by both the FHA and the lender in order to be approved to assume the loan.