Loans provided by the Federal Housing Administration are usually affordable and come with great rates for an array of households. Despite this, some FHA customers want to refinance their loan and save even more money, especially now due to the impacts of COVID-19. There is a new process for FHA refinancing designed to be quick and efficient. Learn more about whether you can take advantage of this fast approval. Professional Mortgage Solutions is here in Rego Park, NY to help you learn more about refinancing your FHA Loan in this week’s blog post.
Benefitting from FHA Streamline Refinancing
FHA Streamline Refinancing was designed to eliminate much of the paperwork and appraisals that are normally required to refinance a loan. Certain eligibility requirements must be met. For instance, you should be current on your loan payments over the last 12 months. Having good credit will also improve your chances of fast approval. If you are in good standing on a current FHA Mortgage, it is likely your credit score is also faring well.
The process is so simple. You may even apply right over the phone, without needing professional assistance. Use caution, as you will create a new loan in the process. Ensure that the new debt-to-income ratio with the new loan amount is something reasonable.
How to Get Approval for FHA Streamline Refinancing
If you are seeking to save money on your current FHA Loan payments, and have good standing, the process to qualify for streamlining is easy. Here are some of the eligibility requirements:
- Your current mortgage must be FHA-insured; a conventional loan will not qualify for the streamline procedures.
- You must be current on your payment history and have had the FHA mortgage for at least 210 days.
- Lenders may disqualify you if you have been delinquent on payments, however, some will overlook this if your mortgage is newer and the payment was under 30 days late.
- Lenders like to see a benefit to applying for streamlining. Examples of a benefit include the ability to make payments more easily or to reduce the term of the loan. In addition, the new interest rate should be lower.
- Many say that the new interest rate, Mortgage Insurance, and principle payments may not exceed the existing mortgage by more than $50.
It is important to note you cannot cash-out from this refinancing option. However, many tell us that the cash saved on new monthly payments feels like a cash-out refinance. We have shared general FHA guidelines in this week’s blog post. Please note that different lenders may have updated their procedures and processes. Professional Mortgage Solutions is here to help people struggling due to COVID-19 to refinance their loan in our Rego Park, NY Offices. Contact our friendly staff with questions today!