What is a FHA Streamline Refinance Mortgage- by djsgjg0045


									What is a FHA Streamline Refinance Mortgage?
 As most zero down mortgage programs have been phased out of the market, more
people have turned to FHA financing for their home loan needs. According to a 2009
NYTimes.com article citing Inside Mortgage Finance as its source, FHA loans
represented only 1.8% of the market back in 2005 and 2006 and have since grown to
account for nearly 17.1% of new originations. Simply put, there are now millions of
homeowners who now have FHA mortgages who may benefit from an FHA
streamline refinance. FHA streamline loans permit qualifying borrowers to refinance
with less paperwork than may be required through other financing channels.
Streamline mortgage loan may also require no appraisal that may remove an
additional $250-500 expense out the transaction. Some lenders and brokers may not
collect income verification, verify employment, or charge lender fees. Basically, an
FHA streamline loan allows a consumer the ability to quickly, and hopefully easily,
refinance their FHA loan with little to no money out of pocket. Why Consider an FHA
Streamline Refinance?
 People have all different reasons for refinancing but the majority of home owners
consider refinancing to save money on their monthly payments or are hoping to
shorten the duration of their repayment period (i.e. switching from a 30 year mortgage
down to a 15 year loan). In a low enough rate environment, it may be possible to
accomplish both of those goals in one step. In 2010, mortgage rates fell to the lowest
rates since Freddie Mac began tracking rates back in the 40's or 50's . 30 year
mortgage rates dropped down in the 4.000 - 4.500% range and 15 year fixed mortgage
rates fell below 4.000% in some scenarios. This market has enabled thousands of
home owners to drop years off their loans while potentially saving tens of thousands
of dollars in interest. It is important to note that cash-out refinancing is not available
with FHA streamline loans.
 Taking the Next Steps
 Current home owners who have FHA insured loans and whose payments are current
and whose loans are in good standing can take advantage of FHA streamline
refinancing with little down side. What closing costs that may exist, can often be
given back in the form of a credit at closing. The lender or broker simply inflates their
rate a bit and earns more money which they then use to credit back to cover any loan
related expenses.
 About FHA Loans
 The Federal Housing Administration (FHA) provides mortgage insurance on home
loans offered by FHA approved lenders. This mortgage insurance protects the lenders
against potential losses resulting from borrowers defaulting on their mortgages. FHA
loans have become increasingly more popular in the past few years as Fannie Mae and
Freddie Mac have tightened their program guidelines making FHA loans one of the
go-to sources for low money down mortgage financing. FHA loans are also known for
having less strict financing guidelines in that credit standards and debt to income
ratios may be slightly more lenient than what is available through other conforming
mortgage loans products.

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