If you are looking into refinancing your home, you're likely overwhelmed with all the options you have to get it done. If you currently have an FHA loan, one unique option that you have is FHA streamline refinancing. As the name implies, the goals is to have your home refinancing done as quickly as possible by streamlining the entire process, which isn't always possible with other types of loans. Here are some common questions about this type of home refinancing.
What Is FHA Streamline Refinancing?
What makes FHA streamline refinancing unique compared to other mortgage products is the speed at which the approval process will go. This is because FHA streamlined refinancing will use the paperwork that was already generated for your existing FHA loan and use it for refinancing. This can trim weeks off the approval process and help ensure that everything happens at a much faster pace.
Can FHA Streamline Refinancing Be Used When Behind On Mortgage Payments?
A reason you may be seeking a home refinancing is to help lower the amount that you owe each month on your mortgage, which will make it more affordable and help prevent you from missing payments. Unfortunately, being behind on your mortgage payment will make you ineligible for this type of home refinancing.
One of the requirements of FHA streamline refinancing is that is must give you a financial benefit when refinancing your home, not cost you more money in the end. While you may be looking to start your 30-year mortgage over again with less principal to pay off and a lower monthly payment, you won't qualify if the loan will cost you more money over the years than simply keeping your existing loan.
Can You Roll Closing Costs Into The New Loan?
While other loans may offer you the ability to roll all your closing costs into the loan and pay it off over time, you need to pay those costs in cash with FHA streamline refinancing. If you do not have the cash on hand to pay for all of the associated fees with a refinance, you won't be able to take advantage of this financial product.
That said, realize that you won't be paying for a lot of the costs that were necessary for your initial mortgage. There will not be an appraisal fee or credit check fee associated with it, and many of the loan origination fees will be reduced since new paperwork doesn't need to be created.
Share26 September 2018
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