subject: Why Use an FHA Streamline Loan [print this page] Why Use an FHA Streamline Loan Why Use an FHA Streamline Loan
Why should an individual use the FHA streamline loan? This loan is a refinance process that is quick and easy to get your mortgage refinanced. Certain rules must be followed, but those who qualify for this process think it is a better way to go.
One reason you would use this type of loan product is you see that refinancing your mortgage will lower your interest rate and thus lower your monthly payments. For most people purchasing their home is the largest purchase they will make in their life. If you have a 30 year mortgage then the amount of interest you will pay during that time is 3 times what you actually pay for the house. That is why if you can lower your interest rate, then over the period of time you have left, you will pay a lot less for the home. When the payment is lowered too, that's an even better plus!
The FHA streamline loan is also a good idea because it is designed to make the paperwork a lot less for closing this loan. This will allow the process to be not only faster, but it allows people to switch from one loan to another without difficulty.
For individuals to qualify for the FHA streamline loan, they need to meet a specific requirements.
Your current mortgage must be an FHA insured mortgage.
The mortgage must be current and not delinquent. If its not then you need to bring your mortgage current before attempting this type of loan product.
The end result should be to lower your interest and your monthly principle otherwise you cannot use this loan product.
That's it!! If you meet the above requirements you are all set to start the FHA streamline loan process. Most lenders don't have a problem with helping you refinance so you shouldn't have a problem getting it done.
But before you make that final decision be sure to count the cost of the refinance. There will be costs like an appraisal and closing costs. If the savings isn't high enough it won't be worth it to pay these costs just to lower your interest rate or payments. Unless your financial situation merits such a change.
Some lenders may even include the closing costs into the new mortgage amount making it even easier. You would only be able to do this if there is enough equity in the home to substantiate the increase. This can only be verified with an appraisal.
It is possible to get an FHA streamline loan without an appraisal. The only way is if the new loan amount does not exceed the original loan amount.
There are many reasons why you should consider using this refinance process. When you can get a loan with a lower interest rate or with better terms, then the answer would be yes to this loan product. But remember it will have to lower your monthly principle too. So your payments will be lower because of the lower principle and interest.
You can get excited when all the factors show that it is a good idea and you already have an FHA loan, the FHA streamline loan product is an excellent choice!
