FHA Mortgages

FHA Streamline Refinance Ideas – FHA Information and Views


Are you interested in a lower interest rate on your home loan? How about a lower monthly payment? Or maybe you have a variable rate mortgage and are looking for a way out for your next rate adjustment?

All of these are motivations to refinance. You will read a lot online about what it means to apply for an FHA Streamline refinance, but what do you need to know besides the things EVERY home loan website is talking about?

Yes, FHA Streamline Refinance loans are for existing FHA borrowers only. Yes, FHA Streamlines usually requires that the borrower get a tangible benefit from the loan, such as a lower interest rate, lower monthly payment, etc.

Yes, FHA Streamlines does not have an FHA mandated credit check or rating requirement. And yes, the lender is free to ask for it anyway.

These are common problems associated with these types of refinance loans. And no, don’t expect to get cash out of your home with this type of refi.

Here is some expert advice you may not find on other credit blogs: The FHA loan rules in HUD 4000.1 clearly state that you may apply for a streamline refinance and be approved (technically, lender requirements may also apply) even if the new loan actually does costs more than the old loan in terms of interest rates and / or monthly payments.

Some of this is common ground on finance and mortgage blogs. You will read a lot about how an adjustable rate mortgage refinanced into an FHA fixed rate mortgage could actually have a higher interest rate than you paid before.

The fixed rate is seen as an advantage, not the rate itself.

But less known? Discussed less? FHA Streamline Loans allow the same types of mortgage surcharges as “regular” refinance and purchase loans – most notably the FHA Energy-Efficient Mortgage, which can be used to pay for additional loan funds for approved energy-efficient home upgrades.

This add-on can add to your mortgage payment and if the total amount increases too much, the lender may require a credit-qualifying FHA Streamline instead of the FHA Streamline option with no credit check.

Some More Expert Advice On FHA Streamline Refinance Loans? Dealing with closing costs. It can be a little tricky to prepay your closing costs, but if your goal is to get a lower interest rate or payment, keeping the new loan amount as low as possible is an important factor.

If you can afford it, avoid closing cost financing or even the energy efficient mortgage option. Lower rates may be within reach, but you should definitely try to keep the new loan as low as possible.