Arizona  FHA Streamline Refinance.info 

 

 

 

 

 

 

Benefits  of a FHA Streamline Interest Rate Reduction Home Loan

 

 

Everyone can benefit from a lower monthly mortgage payment. The FHA streamline Interest Rate Reduction program has additional benefits including…

• Lower payments, without title fees, closing costs and other origination fees added to your loan balance.

• Lower Annual Mortgage Insurance Premiums saving the average borrower between $75-$125/mo

• No Appraisal required - Your home has declined in value and may not appraise for a traditional refinance.While market conditions continue to improve, we still have between 10-20% of homeowner’s underwater (meaning they owe more than their home is worth). Many of these homeowners have excellent credit histories but cannot refinance and take advantage of the current historically low rates, because their homes will not appraise high enough to qualify for a new loan.The benefit of the FHA streamline Interest Rate Reduction program is that an appraisal is not required and you can now take advantage of not only the savings in rate but the mortgage insurance too.

• You want a larger percentage of each mortgage payment applied to your principal.Most people are not happy by how little of the monthly payment from each mortgage payment is applied to principal, especially in the early months. Some try biweekly payments and other tools, but still pay more interest than they desire to pay.Although all mortgages require borrowers to pay interest, there are some loans that allow borrowers to pay less interest immediately and have a larger percentage of each mortgage payment applied to the principal loan balance.By taking advantage of the FHA streamline Interest Rate Reduction program you can get a new loan that requires that you pay less interest and also allows you to accumulate equity faster.

• You plan to pay the loan off early.Why pay a higher rate to lock in a loan for thirty years if you are not going to be in that loan that long. Adjustable Rate Mortgages that have fixed interest for the first 3, 5, or 10 years with Cap’s allow you to take advantage of a lower rate and have lower monthly payments.

• You have one or more borrowers that may need to be removed from the mortgage.Unfortunately, circumstances change and borrowers on loans must sometimes be removed. Borrowers that occupy their homes can use the FHA streamline Interest Rate Reduction program to remove former spouses or significant others (with proper permission) from the mortgage and receive a lower payment in the process, providing that they can income qualify to pay payments without the other borrower(s).In cases when a borrower is deceased, the FHA streamline Interest Rate Reduction program allows the surviving borrower to verify that they have been able to make the last six (6) mortgage payments after the death and then they can receive a new loan with a lower mortgage payment and/or reduce the loan term.

• You paid a large lump sum towards the principal of your mortgage balance, but the payments have not been reduced to reflect the lower balance.Occasionally, borrowers pay a large lump sum (20% or more of the original loan amount) on their loan balances, in an attempt to reduce their overall debts, but they are surprised when their payments stay the same. Although the lump sum will allow the loan to be paid off faster, some borrowers would prefer to have their payment decreased to reflect the new balance. Unfortunately, lump sum payments do not change the amount that borrowers are required to pay each month. The FHA streamline Interest Rate Reduction program allows these borrowers to not only change the amortization on their loan and have their new monthly payment reflect the actual loan balance, but they can lower their payment even more by having a lower interest rate.

• You experienced or anticipate financial changes in your future that may make your current monthly payments less affordable.Let’s face it, Things change. Maybe you will earn less money than before. There may be new additions to your family. Unforeseen expenses may have increased monthly obligations and credit card debt may have become less manageable, desire to restructure monthly expenses to reduce stress. The FHA streamline Interest Rate Reduction program may be a perfect way to lower your mortgage payment without having to endure the intense underwriting process required on traditional refinancing transactions.
   

There are lots of reasons that people participate in FHA streamline and VA streamline transactions.

 

So the real question is does it make sense for me? This is one of the most common questions that homeowners ask. Unfortunately, there is no one answer to this question. The answer depends upon your circumstances, objectives, market conditions and the settlement and closing costs involved. All of these factors must be considered to make a determination if now is the time to take advantage of an Interest Rate reduction program.

 

Some of the issues you may want to consider are:

• How long do you intend to live in the same home or keep the same loan?Rarely do people stay in one home for 30 years. It is even rarer for people to keep the SAME loan the entire term. Rates drop, people withdraw equity and other factors reduce the probability that borrowers will retain a loan for the entire term.You should think about how long you plan to keep the home and make sure that you can recoup the cost of refinancing or think about a hybrid ARM instead of a fixed rate loan. With the new reduction in annual mortgage insurance premium, breaking even on settlement costs is not an issue, so how long you plan to keep the loan is irrelevant.

• What is the probability that rates will fall further? No one has a crystal ball that can determine where rates will be in the future. We are presently at historic lows and timing the market is difficult for even the most seasoned professionals.

• Do the costs make sense in comparison to the savings? There is one simple answer. If you can recoup the costs within the time that you plan to keep the loan, then the transaction is cost-justifiable. This alone should not be the determining factor. Consider the other transaction benefits as well.

• Does the transaction offer any other benefits?  The streamline rate reduction may increase the amount of money that is applied to your principal loan balance each month. Participating in a rate reduction may provide another immediate benefit. The monthly savings after the rate reduction may also free up cash each month to eliminate other bills or apply to savings. Consider all factors.
   

Fortunately, deciding to participate in an streamline interest rate reduction is an easily justifiable decision. There are programs for people looking for long-term solutions and programs for people in search of more conservative short-term options that require little or no upfront costs.