Why FHA Streamline Refinance is the Perfect Solution for Quick and Easy Refinancing?
If you’re looking to refinance your home but want to avoid fees and piles of paperwork, then FHA streamline refinance might just be the solution you’re looking for. This is an option that more and more homeowners are now taking but it’s also one that not everyone is yet familiar with. Read on and we’ll examine what precisely FHA refinance entails and whether it might be a good choice for you.
FHA streamline refinance was introduced in order to speed up the refinancing process and to remove some of the associated fees. This allows a homeowner with an existing FHA loan to refinance their property without incurring additional costs.
Refinancing, of course, means taking out a new loan and using that to pay off your old loan; normally this means switching to cheaper rates. This can normally be a lengthy process, which can potentially put homeowners off of switching to a better loan. With FHA streamline refinancing then, the whole process is much quicker and easier meaning that more people can find a loan with better rates – and potentially save themselves a huge amount of money.
What Makes FHA Streamline Refinance Different?
So what is it that makes FHA streamline refinance different from other refinancing options out there? How is it quicker and simpler?
The main difference is that FHA streamline refinance allows you to change your home loan with no need for an appraisal of your property. This means it doesn’t matter what your home is worth today, only the value of your mortgage. This is great news for those with negative equity, even if your property is currently covered in three inches of water! And unlike other refinance loans, this also means you won’t be forced to pay additional costs or fees. This is what is referred to as an ‘appraisal waiver’ and it’s something that has seen a lot of uptake throughout the US, resulting in many new unlimited LTV (loan-to-value) loans.
In most other respects, these loans act exactly as any other home loan would. You can pick between a fixed rate or adjustable mortgage and select either a 15 or 30 year term. There’s no FHA prepayment penalty and FHA mortgage rates are the exact same as the ‘regular’ FHA loans.
Is FHA Refinance for You?
This has all been particularly beneficial for those homeowners that have been hurt by the downturn in the housing market over the last decade. Things have picked up in the last two years but there are still plenty of properties out there that aren’t worth what they used to be. And of course there are those buyers who just chose the wrong area, or who were unlucky enough to be hit by storms/floods/fire.
Scanning through the news you’ll come across lots of stories of people who have been saved by this option and as it’s so much easier to get started with, there’s really no reason not to consider it. There is no appraisal and no income or asset documentation – you just agree to the new rate and sign the paperwork!