I know that sometimes FHA home loans get a bad rap because of the mortgage insurance premium, but there are benefits that go far beyond that of simply being easier to qualify.
FHA home loans have a built in benefit of allowing you to reduce the interest without having to go through the expense and paperwork of the entire home loan process again.
I know, I know…I’m usually the first one to call B.S. when something sounds too good to be true – so I want to make sure I emphasize that it is a much easier process, but of course there is still a little bit of paperwork.
What’s the Catch?
That’s just it – there really isn’t one. There are a couple of things you should be aware of though.
No Cost Streamline – There are minimal costs to doing a FHA streamline refinance that the lender will pay for. The way the lender pays for these fees is by offering you an interest rate sufficient to “cover the cost“.
Qualifying for a FHA Streamline Refinance
Paperwork: Different lenders may or may not require all of this paperwork. As a direct lender offering this program, here is what we ask for from the home owner
- Disclosures – Credit authorization and signed 4506T
- Loan Application – This is the same application you completed last time you applied for a loan
- Mortgage payment coupon/statement – Your most recent mortgage statement
- Homeowner’s insurance declaration page or agent’s contact information
- Copy of Driver’s License and Social Security Card
FHA Streamline Refinance Special Benefits
- No Appraisal Required
- No Income Verification
- Skip 1 Payment
- No Cash to Close (in most cases)
I am sure there are many lenders out there bombarding you with refinancing opportunities, it’s annoying – I totally get that. Just don’t let that discourage you from looking into this option if you have a lender you can trust.
If you’re in California, we’re happy to run the numbers to see if you can save a few bucks. If you’re outside California, drop me a quick comment below and I may be able to recommend someone I trust.
The bottom line on this is that there’s no cost to explore this opportunity and if you cannot realize at least a 5% improvement in payment, FHA will not allow you to refinance. Win/Win.