What Is An FHA Streamline Refinance?
A FHA Streamline Refinance is a special mortgage product that is reserved for homeowners with existing FHA mortgages. An FHA Streamline Refinance is a fast and simple way for an FHA-insured homeowner to refinance their respective mortgage.
The FHA Streamline Refinance program’s most attractive characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your home’s current value, regardless of what your home is actually worth today.
In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty. A lot of home owners have been taking advantage of this “appraisal waiver” aspect which allows unlimited loan-to-value (LTV) home loans via the FHA Streamline Refinance program.
Beyond this “no appraisal” feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It’s available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there’s no FHA prepayment penalty to worry about.
Another benefit is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a regular FHA loans. There’s no penalty for being underwater, or for having very little equity.
If an FHA refinance sounds like something that is right for you, or you have any questions about FHA refinances, please feel free to contact me at any time.