FHA Streamline Refinances are a good option for people that bought their homes with a higher interest rates than what are currently available.
The up front mortgage insurance premium is based on a .01% multiplier which is extremely low. The monthly Mortgage Insurance premium is based on a .55% multiplier which is much more affordable than the monthly for a new purchase.
An example of how a FHA Streamline Refinance works is as follows:
A borrower purchased a home in Feb 2009 and got a loan amount of $224,549 at over 5%. Now they can go with 4.125% and decrease their total payment by $170.
Some people are electing to go with a 25 year term and still decreasing their payment.
If the closing costs are rolled into the loan, then an appraisal is required. If the closing costs are paid by the borrower or by credit from the rate, then no appraisal is needed.
Most lenders require a 640 credit score or above, but there are some that will go down to a 600 score as long as there haven’t been any mortgage lates in the last 24 months.
There are streamline refinances available for VA Home Loans and USDA Rural Housing Loans as well. The conventional loans can be done with the HARP II program to reduce rates and payments.
If you want more information on these loan options, please contact JoAnn Moore at 302.855.1306, 302.236.1229 or MMODJoAnn@aol.com. JoAnn is a Licensed Mortgage Professional and a Certified Military Housing Specialist.