FHA Loans to Refinance Your Mortgage

If your original mortgage was an FHA mortgage loan and you are looking for a simple loan to refinance your mortgage and save you money every month, then an FHA Streamline Mortgage may be just the ticket for you.

An FHA Streamline Refinance Loan isn’t necessarily any faster than a convention loan to refinance a mortgage, but with the FHS streamline loan there is far less paperwork – which is always welcome.

One of the limits to an FHA Streamline Mortgage Loan is that you cannot take any cash out of the loan. If your home has a lot of equity and you are hoping to get your hands on some of that cash, then an FHA Streamline Loan is not the loan for which you are you’re looking.

Qualifying for an FHA Streamline Loan is simple. First, your original loan must have been insured by the FHA. Second, your loan must be current. That means you must not be behind on any payments, and third, the new loan must reduce your monthly principal and interest payments. What all this comes down is the fact that the new loan must be at a lower rate of interest than the original loan. As a result, your monthly mortgage payments will be significantly lowered.

The last requirement, as already mentioned, is that you must not take any cash out of the deal. The purpose of the refinance must simply be to lower your monthly principal and interest payments.

There are two things to be aware of when apply for an FHA Streamline refinancing loan. It should raise a red flag if the lender’s ad says that she | he is the only one capable of getting you an FHA Streamline loan. Almost any lender can make you an FHA Streamline refinance loan.

The second thing to be aware of are ads that say the loan is “Free.” Ads that claim there are no fees for their loans are not being totally honest with you. There are just as many fees with a “Free” loan as with any other loan. What the “Free” loans do is they add the fees into your loan amount so that you do not have to pay the majority of fees at closing. While this may seem like a good idea, keep in mind that you will be paying interest on the fees that have been wrapped into your loan for the next 15 or 30 years.

Remember, an FHA refinancing loan may be a very good choice as long as your original loan was insured through the FHA, you are not taking out any cash, and the new loan will reduce your monthly payments are save you money over the long term.