Wednesday, August 15, 2012

FHA Streamline Refinance Program


FHA-backed loans aren’t just for first-time home buyers or those recovering from a foreclosure. If you already have a FHA mortgage loan, you can now save money through a refinance. And it’s getting easier!

The FHA recently announced that it’s lowering the FHA MIP (mortgage insurance premium) on FHA mortgages from the current rate.

What this means for you is that you can significantly lower your monthly payments. This, along with the historically low interest rates, can really benefit some homeowners who currently have an FHA mortgage on their home.

What is the FHA streamline refinance?
It’s a special mortgage product reserved for homeowners with existing FHA mortgages. (What this means is that homeowners with conventional mortgages via Fannie Mae or Freddie Mac can't use it.)

What’s so special about the FHA streamline refinance?
What is particularly special is that the program doesn’t a home appraisal. Instead, you can use your original purchase price as your home's current value, no matter what your home is actually worth today. This is a seriously big deal: many homeowners are “underwater” on their mortgages—in other words, they owe more than the house is currently worth. This program doesn’t care; even if you owe far more than your home is currently worth, you can still refinance.
Another big plus is that FHA mortgage rates are as low with the Streamline Refinance program as with "regular" FHA loans. A reminder that these loans include:
·         Minimal down payment and closing costs.
·         The seller can pay up to 6% of sales price towards closing and prepaid costs.
·         No cash reserves are required.
·         There are easier qualifications for first-time home buyer loans.
·         Higher debt-to-income ratio requirements.
·         Lower minimum FICO score or credit score requirements: 580 FICO, or in some cases no credit scores at all.
·         FHA will allow a home purchase two years after a bankruptcy.
·         FHA will allow a home purchase three years after a foreclosure or notice of default.

2012 FHA streamline refinance
What other advantages does the streamline offer?
It’s reasonably easy to qualify for the FHA streamline refinance. In fact, the reality is that you can be out-of-work, without income, carry a terrible credit rating and have no home equity, and still be approved. This is because there’s no credit check, no need for income verification, no home appraisal, and no income verification.

Why is the FHA offering this program?
The FHA is not in the mortgage business; it’s in the business of insuring mortgages. It’s therefore in the FHA’s best interest to make sure that everyone has the best possible mortgage product with the lowest possible interest rates, which in turn leads to fewer mortgage defaults.

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posted by Avrus Mortgage @ Wednesday, August 15, 2012   0 Comments Links to this post

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