The Federal Housing Administration or FHA falls under the authority of the U.S. Department of Housing and Urban Development or HUD. FHA home refinance loans are backed and guaranteed by the federal government. Since the federal government makes a guarantee on the loan, there is going to be less risk assumed by the financial lending institution, allowing them to provide you with a lower interest rate.
Benefits of an FHA Streamline Mortgage Refinance
Availing you a streamline mortgage refinance will allow the lender to produce a nominal amount of documentation and underwriting, as opposed to a normal refinance. This means less time and hassle for paperwork and more time for saving money and getting solutions. Some of the benefits for the Streamline loan can be:
• Limited documentation to fill out
• Flexible credit requirements available
• Could be capable of avoiding an appraisal
• You could be capable of refinancing even if more is owed than what the home is worth.
Getting a mortgage modification with an FHA Streamline Mortgage Refinance could result in lower monthly payment for you to make. There are three main reasons that this type of a refinance could mean lower monthly payments for you:
1. The interest rate is lower than what it was on the original loan
2. The amount that you still owe is lower than the original loan
3. The loan can be extended for a longer period of time before being paid back
FHA Streamline Refinance Associated Costs
There can be costs to you with mortgage refinance loans. The cost that can be associated with the refinance should be weighed against the reduction that you would be getting in your monthly payments. The cost associated with refinance can also be added onto the actual loan amount or can also be paid separately if you prefer. There can also be a no cost loan, but this would end up with a higher interest rate so be aware of this.
Requirements for a FHA Streamline Mortgage Refinance
• The current mortgage that you have needs to be an FHA backed loan
• Your current mortgage has to be current and not behind on anything
• The refinance needs to result in a lower monthly payment for you
• The Streamline refinance is the balance owed only; extra cash cannot be taken out and added to the loan.
Other Federal Mortgage Assistance Programs
The Obama Administration has developed a great program that is designed to help struggling homeowner’s called, Making Home Affordable Refinance Program. The program has two different parts to it, a refinancing program and a mortgage modification program. The two programs are:
• Home Affordable Refinance Program (HARP)
• Home Affordable Modification Program (HAMP)
If you happen to be looking to lower what your monthly mortgage payments are then you very well may qualify for one of these programs.
Not every financial lender will approve you for FHA mortgage loans. The first step that you should take is to contact an approved mortgage broker and find out what options are available to you and your own specific unique situation. There are a few options that can be financial beneficial to a lot of different people and it's up to you to take advantage of it before it's too late.