Property owners with existing mortgage loans are always worried about high interest payments. The Federal Housing Administration has come up with several loan programs to help ease the burden of home mortgage borrowers. One of the programs that had been used by many homeowners since the early part of 1980 is FHA streamline loans. This is available to those who have an existing FHA loan.
This loan is a refinancing loan that does not require income verification or credit check since the loan is only available for those borrowers with an existing FHA loans and have therefore passed the credit and income checks before. When you apply for an FHA streamline loan you can elect not to have your property appraised and use the original appraisal instead. However this will mean that the new loan cannot exceed the original amount that was borrowed. If the value of your property has increased over time, it may be wiser to have the home appraised to qualify for a higher loan amount.
The process for this loan is simpler and you do not have to meet with the loan officer. It is possible to conduct this through the phone or online. However the bank may require you to personally sign some of the documents which can be mailed or presented to the bank directly. An FHA streamline loan is not the same as other refinancing loan where you can get cash back after signing the contract. This loan guarantees that the monthly payment will be lowered permanently.
One of the requirements of this loan is that your home is your main residence. Another requirement is that you should never be behind in your loan payment. As mentioned earlier you should have an existing FHA loan to which you have already made six payments to qualify for an FHA streamline loan. If the mortgage to be refinanced is more than 12 months old, the borrower should only have one month overdue and that this will be paid within three months after the loan application. The refinance loan that will be availed of through this loan must lower the total previous mortgage payment by 5 per cent. The lender must certify that the borrower is employed and receiving an income and that any other existing financing is subordinate and does not exceed 125 per cent of the combined loan to value amount.
The borrower should not receive cash in excess of $500 from the loan proceeds. The terms of the FHA streamline loan should be lower than 30 years or the balance of the terms of the mortgage plus an additional 12 years. The FHA streamline refinance loan when availed of without appraisal is limited to the unpaid principal of the original mortgage less the refund credit of the mortgage insurance premium. If the new upfront mortgage insurance premium is to be financed in the mortgage, this will be added to the new loan. The new refinancing loan does not require the borrower to present a termite report.
The FHA has several programs to help homeowners to refinance their mortgage loans. The FHA streamline loan program is the simplest and the least costly. If you need loan refinancing to avoid foreclosure, the FHA streamline may be the loan program for you. Do check other refinancing options available fro FHA and get expert advice from the lender on which one will be the best option for your situation.