There are several options you can take to refinance your home, but if you have an FHA mortgage, the best option would be through FHA streamline refinancing. Exclusive to FHA mortgage homeowners, the FHA streamline refinance program is quite similar to conventional loan products, but it has several advantages which these products do not have. Three of the most important benefits include:
It does not require a home appraisal
Probably the biggest advantage the FHA streamline refinance program has over other types of mortgage refinancing is that it does need a home appraisal. Instead, the FHA relies on the original purchase price of the house as its current value, regardless of its worth today. In addition, the program offers unlimited loan-to-value, making it especially beneficial for those who live in Arizona, California, Florida and Georgia.
It is designed for underwater mortgages
Unlike other loan products which steer clear of mortgages whose worth is more than the value of the house, the FHA streamline program is designed by the government to seek out and refinance such underwater mortgages. So regardless of how much your FHA mortgage is worth, the FHA will still refinance it without any additional cost or penalty whatsoever.
It needs very little paperwork
Another big benefit of FHA streamline refinancing is that it does not look into employment status and credit reports. This means that even if you are out of work and have a terrible credit score, this will not affect your application for refinancing in any way. The only requirements of the program is that the mortgage must be endorsed by the FHA on or before May 31, 2009, it must not be delinquent for the past 12 months, and that the refinance results in the lowering of the borrower’s monthly payment by at least 5%.
Get a free FHA streamline refinance quote today and start saving money on your mortgage!