FHA Streamline Refinance Process
FHA loans are a type of nonconventional mortgage with flexible approval requirements that help many types of borrowers become homeowners. FHA Streamline refinancing is a refinancing solution that helps borrowers save month after month in interest and/or MIP. In this week’s Nickel City Funding blog, we’ll outline the FHA streamline process, a simplified refinance option for clients with existing FHA mortgages. If you have further questions about this and other refinance options in North Tonawanda, Hamburg, Amherst, West Seneca, Lancaster, or surrounding NY, we’re here to help.
FHA Streamline refinance is available to homeowners with existing FHA loans for at least six months who have good payment history and who will financially benefit from refinance (a stipulation designed to protect borrowers from bad refinancing). Good payment history is defined as at least three prior months’ payments made on time, and no more than one payment 30 days late or more in the past year.
Comparing Quotes from Approved Lenders
We encourage every homeowner considering refinance – FHA or otherwise – to get quotes from several FHA-approved lenders. Clients do not have to refinance through the same lender that financed their original FHA loans. By comparing rates and fees for each lender, borrowers can make the best decisions for their unique needs. Mortgage professionals can assist you by comparing several qualified lenders at once.
Choosing to Have or Not Have Appraisal
One great benefit of FHA Streamline refinance is that a new home appraisal is not required for approval. Appraisals cost money to schedule and can take several weeks to complete, in some cases. More importantly, homeowners who order an appraisal must have enough home equity to cover the existing loan balance of the loan, due interest and closing costs, to then get approved for refinancing. Without this equity, the FHA Streamline can be denied. Because of these reasons, many FHA Streamline refinancers opt out of voluntary appraisal.
There is a benefit to ordering an appraisal during an FHA Streamline in that the closing costs of the new refinance can be included in the new loan. Without an appraisal, FHA Streamline refinancers must pay closing costs in cash.
Official Application and Closing
Once you’ve chosen a lender you want to work with, he or she will help you fill out a Uniform Residential Loan Application with basic information about your finances, employment and debt. Once this is officially approved, your lender will prepare closing documents that secure your refinanced loan and pay off your old FHA mortgage. If you are paying closing costs, they are due at this point.
See How You Could Save Today
If you’re interested in an FHA Streamline refinance, FHA cash-out refinance, or any other type of mortgage solution, the professionals at Nickel City Funding would love the chance to assist you. Come back for more on our weekly blog, and contact us to schedule a complimentary consultation and free quote. We happily help clients in North Tonawanda, Hamburg, Amherst, West Seneca, Lancaster, and nearby New York, so call us today.