| An FHA streamline refinance has multiple benefits for | | | | paying them out of pocket. In some instances, |
| homeowners who want to refinance their current FHA | | | | homeowners can choose to obtain a higher rate in |
| mortgages. One of these benefits includes a lower | | | | exchange for lower closing costs. On the other hand, if |
| interest rate. A lower interest rate, along with the other | | | | there is sufficient equity in the home, a homeowner |
| benefits of the loan, will save homeowners money that | | | | can decide to have the closing costs included in the |
| they can use to pay off other debt or to pay for other | | | | new loan amount. An appraisal will determine if there is |
| expenses. | | | | an adequate amount of home equity for the |
| What is an FHA Streamline Refinance? | | | | homeowner to choose this option. |
| The purpose of this type of financing is to lower a | | | | Benefits of this Type of Financing |
| homeowner's interest rate on his or her loan and, in | | | | Refinancing with this loan can lower a homeowner's |
| turn, lower his or her monthly mortgage payment. This | | | | rate and monthly payment and save him or her money |
| loan allows homeowners to refinance their existing | | | | over time. This type of loan has more efficient |
| home loans with a more efficient process. With this | | | | processing when compared with other home loans. It |
| type of financing, there is less documentation and less | | | | can have fewer requirements, and, in some cases, the |
| underwriting, which can make the loan process | | | | closing costs can be financed so homeowners will |
| significantly quicker. There is also an option to refinance | | | | have less money to pay upfront. This saves them |
| with this type of loan without having to get an | | | | more money for their other expenses. |
| appraisal, as long as certain requirements are met. If no | | | | There are not strict eligibility requirements for this type |
| appraisal is done, the new loan amount cannot be | | | | of financing. Homeowners do not need a high credit |
| more than the original loan that was taken out by the | | | | score or income to qualify for this loan, but most |
| homeowner. | | | | lenders will require that a borrower have a credit score |
| Requirements of this Loan | | | | of at least 620. For homeowners who would like more |
| A homeowner must already have an FHA mortgage | | | | refinancing options besides the streamline refinance, |
| that is current in order to qualify for this type of | | | | the FHA also has refinance loans that allow a |
| financing. This means there can be no delinquent | | | | homeowner to consolidate debt, change the terms of |
| payments on the mortgage. With this particular type of | | | | his or her loan or receive cash back. |
| financing, no additional cash can be taken out. If a | | | | This type of financing is a great option for current |
| homeowner would like to receive cash back when | | | | homeowners who want a quick way to reduce their |
| refinancing his or her loan, there is a cash-out refinance | | | | current interest rates and lower their monthly |
| option available, but this option is not a streamline loan. | | | | payments without having to meet all of the standard |
| There are closing costs associated with this loan, but a | | | | requirements for a home refinance loan. |
| homeowner has options that allow him or her to avoid | | | | |