The FHA streamline refinance is a great way to lower your rate and payment if you currently have an FHA loan.
This program was created to reduce the time and cost of refinancing for FHA borrowers, especially those who have lost value in their homes.
Here are some of the main benefits of an FHA streamline refinance:
Keep in mind that some lenders require additional items. To find out if you qualify, click here to complete a short online form.
You may be wondering why the Federal Housing Administration (FHA) created this refinance program. The reasoning is simple. Millions of home buyers used an FHA loan to buy their current home. So FHA owns the loan and has to pay in the case of borrower default. By lowering interest rates and payments, homes are more affordable and people stay in their homes longer.
Interest rates have dropped significantly since some FHA buyers have purchased their homes. Also, values have dropped. The FHA streamline refinance program is in place so that millions of home owners can take advantage of today’s low rates. Without this program, many would not be able to refinance.
The FHA streamline refinance has been around for years. But there are some changes in 2013. Some streamline refinances are eligible for a reduced upfront mortgage insurance premium of just 0.01% of the loan amount, instead of the typical 1.75%.
Also, the annual premium has been reduced to just 0.55%. These reductions occured on June 11, 2012 and are still in effect.
To qualify for the reduce premium, the current FHA loan must have been endorsed (closed and finalized with FHA) on or before May 31, 2009.
According to HUD, 3.4 million homeowners with FHA loans could save about $250 per month, or $3,000 per year by refinancing.
If you are interested in taking advantage of low home rates and affordable housing, consider looking into an FHA loan or an FHA refinance. Speak with a licensed professional who can help you discover how much you can save on your mortgage!