Streamline FHA refinance
So about two weeks ago I got a letter in the mail from a finance company offering a new low interest rate on my home FHA home loan. I should hurry and take advantage of the new low rates and drop my interest rate from 6% to 5% with no out of pocket money. Because of the recent Obama stimulus package many new options are now available to help save money with home loans, including a streamline FHA refinance.
At first I was very skeptical. I have never heard the term streamline FHA refinance before so I had to do a little research. After just a few minutes and several website articles I realize streamline loans are a totally legit way to refinance your home loan.
Your loan must meet a few guidelines before it’s eligible for the refinance.
- The loan must already be insured by the FHA.
- You have to be current on your mortgage payments with no late notice.
- The refinance must lower your interest rate and monthly payment
- No money can be received back to the borrower as a result of the refinance.
I contacted the company and started the process. The entire process was very simple and only required verification of employment, copy of our drivers license, social security numbers, and home owners insurance. We closed the streamline loan in less than 10 days. The underwriter even came to our house to sign the loan papers.
The only negative thing to say about the whole process was about $1,500 in closing costs due to the lender which wasn’t ever disclosed during the process. However, this is much lower than any other home loan I have every closed. Our escrow account even transferred over so that money wasn’t due at closing. The $1,500 was rolled into our loan so there was no out of pocket money due at closing. We lowered our interest rate 1% and our monthly payment decreased by $135. We should recover the closing costs in less than one year. Best thing about the streamline loan is that if the interest rate dropw another percent we can do the process again!