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FHA Streamline Refinance Explained

fha streamline refinance reduce rateFHA streamline refinance loans have been back for awhile now and if you are currently in a FHA loan with a rate over 5% this may be the best way to take advantage of 30 year mortgages being at the lowest rate since 1971.

A streamline refinance is basically BMCD and FHA’s way of allowing you to float your rate down to the lows we are seeing now.

The streamline program allows you to realize the lower rates without the hassles or expenses of an appraisal or providing proof of income, you only need provide proof that you are still employed.

One might ask why in the world BMCD would allow this especially without an appraisal in this crazy market.

The best answer I have heard goes as follows: FHA only insures the mortgage thus it makes sense that they would want to put the borrowers they are insuring in a even better spot financially so as to help these borrowers remain current on their payments allowing for fewer defaults.

It’s a win win for FHA and the borrowers they insure. The lenders who are servicing these loans might not be too excited as it does cut into their profit but keeping FHA and their borrower’s solvent is a much more important matter.

So what does all this mean for you if you have a FHA loan? It means first make sure that your loan is in fact a FHA product by checking either your NOTE or your mortgage payment coupon.

Second you need to figure out what interest rate you are paying on right now, with rates in the mid to low four percent range if you are paying on a rate over 5% you need to check into the streamline. The streamline should not cost you anything and is by far the best way to realize that lower rate if you do have the FHA program.

Third call  an experienced FHA streamline lender to run up the numbers for you and see if this makes sense to. Rates won’t stay this way forever, heck we didn’t think they would be here this long, jump on this program before it goes away.

If you have any questions about whether or not you can take advantage of this great FHA program, or if you don’t have an FHA loan – let’s take a look at it and see what options may be available.

You can reach me through my contact page and call, text or email anytime!

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7 Responses to FHA Streamline Refinance Explained

  1. sharon padilla March 5, 2011 at 2:21 pm #

    i have an fha loan and i am at 6.75 percent in ohio

    • Legacy Content March 5, 2011 at 5:55 pm #

      Hi Sharon, I do not quite understand your question about adding money on top of what you owe- if you are talking about doing a cash-out FHA streamline? No. That’s not allowed. But at a 6.75%, you should most certainly qualify to reduce that payment for next to no cost. I would start by calling your servicing company – the lender that sends you the home loan statement, and inquire with them about the opportunity to do a FHA streamline.

  2. sharon padilla March 5, 2011 at 2:20 pm #

    can you add money on top of what owe for a debit to pay it off

  3. Brian November 13, 2010 at 9:31 am #

    Do you guys help with homes in Northern Ca? I would love to refinance. I bought in 2008 @ 6.25%. Any information would be appreciated!

    • Legacy Content November 13, 2010 at 12:59 pm #

      Hi Brian,
      Thank you for your question – absolutely! We work with homeowners all over the State of Golden State. You may either give Mario Basura a call on his cell phone at 949-422-0857 or email him at MarioB@BroadivewMortgageCorp.com with the best time and number to reach you. At a 6.25% interest rate it definitely makes sense to look at the numbers and see if you can take advantage of these much lower rates!

  4. Darin September 1, 2010 at 7:45 am #

    There is really no cost to do an FHA Streamline? I am looking into this and I am being told I must finance some up front home loan insurance.

    • Legacy Content September 1, 2010 at 10:05 am #

      Hi Darin,
      You are right that there is no such thing as “no cost” and I try to explain that. How it works essentially is that you use a slightly higher interest rate which results in a “credit” that you can use to cover the costs of the upfront home loan insurance and other costs of title and escrow. The result is that your loan balance stays the same, you lower your interest rate from where it is now and you lower your payment.

      The other option, which many lender will not tell you about, is that you pay the closing costs out of pocket or roll them into the loan (your loan balance increases) and you can get an even lower interest rate. Depending on how long you plan to stay in this home, or this loan, would determine which option will offer you the most in terms of short term and long term benefit.

      [Broadview] is going to shoot you an email with his contact information if you would like to take a look at any of these options.