Top 3 benefits of fha streamline refinance
FHA Streamline Refinance, a loan which allows you to reduce the current rate of interest on your home loan and often without an assessment. FHA refers to Federal Housing Administration, which helps you cut on your expenses, reducing the paperwork and saving on your time and money. Banks and mortgage firms offer these FHA loans to protect the lender in times you evade on mortgage.
This is mainly designed to help those with less than perfect credit, that is to say, if your credit score lies between 620 and 740, you can compare the deal amid FHA and conventional financing.
There may be events like sending your child to college, being on a vacation, amalgamating bills, making home improvements or any such events where homeowners may get tapped into the equity they have gathered for them to help with such expenses. Another thing to keep in mind is that FHA refinance loans are only available to ones who own homes and use it as a principal residence.
The benefits FHA streamline refinance offers includes lower fees, reduced interest rates and expedited processing. Here we would discuss these in more details:
- Lower Fees: The FHA, like any insurer charges premium to cover its liabilities in the form of recurring monthly fees and upfront payment. As of June 2012, the current upfront premium is 1.75% of the loan amount, monthly fees equals 1.25% of the outstanding balance on annual basis. This implies that you can save money with FHA streamline finance.
- Reduced Interest Rates: The greatest advantage FHA streamline refinance offers is that that it helps you lower your expenses of housing. This can be done only on a fixed rate FHA loan with a streamline refinance mortgage, if new loan reduces your interest payments and monthly principal payments. The assistance it offers you is that you have to pay lower as compared to other refinance loans which could require you to pay higher.
- Expedited Processing Time: It generally takes a few weeks to finish the appraisal report from the time a lender orders it. In case of FHA streamline refinance, you simply skip the step, hence saving on your time. It even doesn�t need to verify your income or check your credit report. However, he possesses all the rights to seek these details to see whether or not you meet the eligibility guidelines.
Opting for FHA streamline refinance would not just help you reduce expenses, but also give you a shorter turnaround time. Being an easy way to get qualified, it can certainly assist you in annual savings.