January 4th, 2018 7:12 AM by Jackie A. Graves
The FHA Streamline Refinance program is a special refinance program for people who have a Federal Housing Administration (FHA) loan. It is the simplest and easiest way to refinance an FHA loan. Unlike a traditional refinance an FHA Streamline Refinance allows a borrower to refinance without having to verify their income and assets.
An appraisal might not be required either depending on how much you have paid on your original loan balance. One of the most advantageous aspects of this program is that it allows for an unlimited loan-to-value ratio. Therefore, if you are severely underwater you still may be able to take advantage of record low mortgage rates by refinancing with an FHA streamline.
The advantage of doing an FHA Streamline Refinance with an appraisal is that you are able to roll your closing costs into the loan. You are only required to have an appraisal if your new loan amount exceeds your original loan amount by 1.5 percent.
If you do an FHA Streamline Refinance without an appraisal you are not able to roll your closing costs into the loan. Hence, you will need to be prepared to pay your closing costs out of pocket or talk to your lender about whether they can cover your closing costs in exchange for paying a higher interest rate.
We encourage you to shop around for the most competitive mortgage rates and fees for an FHA Streamline Refinance. Make sure to check with your current servicer and Zillow, the only comparison shopping site for FHA Streamline Refinance loans for underwater borrowers.
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