Are you ready to refinance your FHA loan? If you are using the FHA streamline program, you don’t have to use your current lender. Many borrowers assume they have to stay with the same bank, but that’s not the case. You are free to shop around and use any FHA approved lender that you choose.
So how do you find the right lender for you? Keep reading to find out.
Get Rate Quotes
It doesn’t cost you anything to call around to different lenders and find out what rate they may offer you. It also doesn’t hurt your credit. You don’t have to let each lender pull your credit, but even that wouldn’t hurt. As long as you get rate quotes within 3 – 4 weeks, the credit bureaus recognize that you are rate shopping and only hit you for one inquiry on your credit report.
When you talk to different lenders, you’ll want a good idea of your qualifying factors. They’ll need to know:
- Your estimated credit score
- Your gross monthly income
- The estimated amount of your debt
- The amount of your current mortgage payment
The lender can then use this information to determine what rate they can quote you.
Compare Rate Quotes
Once you have rate quotes from a few lenders, it’s time to compare them to one another. Make sure you get the same type of offer from each lender, though. For example, it doesn’t make sense to compare an adjustable rate loan to a fixed rate loan. You want to compare apples-to-apples for the best results.
As you compare the rate quotes, you’ll want to look at more than just the interest rate. You’ll also want to focus on the closing costs and APR. Comparing closing costs will allow you to determine which lender is charging you the most upfront. If two lenders offer the same interest rate, but one charges $5,000 more in closing costs, it’s obvious who you should use. Just don’t ignore this factor.
Talk to Your Current Lender
Don’t avoid talking to your current lender about financing with the FHA streamline program. You may be surprised to find out that they have a good deal for you too. Even if the interest rates they advertise aren’t lower than what you have now, they may have better rates for current customers.
Lenders don’t want to lose current customers. They’d rather retain your loyalty by lowering your interest rate than letting you go elsewhere. After you shop around for a better rate, you can present them to your current lender to see if they will match the rates or even beat them for you.
You can find FHA approved lenders just about anywhere today. You can start with your local lenders to see what they have to offer. We also suggest that you try online lenders and even mortgage brokers. This way you expose yourself to as many lenders as possible. With each of these lenders vying for your business, you’re likely to find an interest rate that will suit your needs and save you the maximum amount of money each month.
Even though you don’t have to prove many things to a lender to refinance with the FHA streamline program, it’s a good idea to check on your credit before you apply. The FHA doesn’t require lenders to pull your credit, but a majority of lenders do just to make sure that you are a good financial risk. With a good credit score and a net tangible benefit, you should put yourself in a good spot to get low interest rate quotes on your streamline refinance.