| The FHA has allowed streamlined refinances since the | | | | be appraised. The purpose of using the refinance loan |
| early '80s to help lower the amount of a person's | | | | setup without an appraisal is to reduce the amount of |
| monthly mortgage payment and quickly, an FHA | | | | the monthly mortgage payment. In this case, the |
| streamline refinance is an option. While the federal | | | | homeowner would not be able to take any money out |
| government offers a number of loan programs, this | | | | of the home's equity whereas refinancing with an |
| particular one is popular in that it can be secured very | | | | appraisal would allow the homeowner to withdraw |
| quickly. Therefore, anyone with an FHA or VA | | | | cash. |
| mortgage loan, one that is in good standing, would find | | | | The rules for an FHA streamline refinance are |
| it easy to qualify for a refinance loan to lower | | | | somewhat different if the property is considered an |
| payments. | | | | investment. An investment property is a property that |
| Known as a "fast track" option, the FHA streamline | | | | the borrower does not actually live in. In a situation |
| refinance loan is designed so the underwriting process | | | | such as this, the only amount that could be refinanced |
| associated with mortgage loans takes less time. | | | | would be the balance of the existing loan and can only |
| However, this does not mean that there are no costs | | | | be refinanced without an appraisal. In addition, the |
| involved with the refinance. There are basic | | | | amount of this type of refinance loan could only |
| requirements that must also be met including:o The | | | | exceed the standard limitations for an FHA or VA |
| mortgage must already be FHA insuredo The | | | | loan. |
| mortgage must not be delinquento The refinance will | | | | Depending on the lender of an FHA streamline |
| lower the borrower's monthly principal and interest | | | | refinance loan, some offer loans with no associated |
| paymentso No cash can be taken out during the | | | | costs but sometimes, these loans might have a higher |
| process | | | | interest rate. This simply means that there is no |
| Using lower interest rates currently being offered, | | | | out-of-pocket cost associated with the FHA streamline |
| lenders can ultimately decrease the monthly mortgage | | | | refinance at the time, but the homeowner eventually |
| payment. For a home with 18 years or more of | | | | pays for those costs overtime by paying a higher |
| payments still left, the refinanced loan would go back | | | | interest rate on the new loan. The premium received |
| to a 30-year payoff. However, for loans with 12 years | | | | by the lender is used to pay the closing costs on the |
| or less until maturity, the life of the loan would be | | | | newly refinanced loan. |
| based on the original loan's maturity date. | | | | The bottom line is that if a homeowner makes |
| In addition to people enjoying lower mortgage | | | | payments on time and at some point wants to |
| payments, one of the benefits for an FHA streamline | | | | refinance, the opportunity would exist with an FHA |
| refinance is that the property may or may not need to | | | | streamline refinance loan. |