The FHA streamline refinance program is very popular right now – because interest rates are lower than they have been in recent years and more people are in FHA loans than in the past because of the elimination of other loan programs.
In order to participate in the FHA streamline refinance program, there are 3 criteria that must be met:
- The property must be owner-occupied (no investment properties allowed)
- The borrower can’t have more than 2 thirty-day late payments on their mortgage in the last 12 months
- The loan scenario must benefit the borrower – also called a “ net tangible benefit” in the mortgage world.
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FHA Streamline Refinance: Net Tangible Benefit?
The net tangible benefit test simply means that the benefit of doing the transaction outweighs any costs that are associated with the loan. As you know, any time that you go through with a transaction on something as large as your home, there are costs associated with the transaction and FHA wants to be sure that you don’t put yourself in a spot where those costs are outweighing the benefits.
There are various closing cost alternatives with the FHA streamline refinance program – such as no out of pocket closing costs or even no closing costs (where you accept a higher rate and allow the lender to pay your closing costs) but no matter what the scenario is, it must pass the net tangible benefit test.
To find out if the FHA streamline refinance program can benefit you, be sure to contact an FHA streamline refinance expert and ask them about the net tangible benefit test is something that you can pass in order to qualify for the FHA streamline program. 888-448-2669.