FHA streamlined loans are designed to help homeowners lower their monthly mortgage payments as well as their interest rates. However, what do you need to qualify for one? For starters you need to have an existing FHA mortgage. If you don’t have one you can either refinance in the conventional way, or apply for an FHA refinancing loan.
How to Apply
Applying involves the usual credit check where they will look at your debt to income ratio and verify your employment, so mortgage refinance with bad credit can sometimes be difficult. FHA mortgage streamline refinance can get you many of the same results. Refinancing to an FHA mortgage can offer better rates and lower payments than your conventional mortgage.
If you already have an FHA insured home loan requirements for a streamline will include the following.
- You must be current on your existing loan with all the mortgage payments made on time within the last year
- You will need an FHA approved lender in order to refinance. If you do not want to use your current lender whatever bank you choose must also be FHA approved.
- You must have owned the original property for at least six months before you can even qualify for refinancing.
- Closing costs will have to be paid up front but can be arranged through FHA streamlined loans. You can include the closing costs into the loan but you must have enough equity already built up in your home to cover the extra amount.
Streamlined Loans for Home Improvements
One other streamline option to consider is called the FHA Streamline 203(k) loan. This is for people who want to refinance in order to make home improvements. The 203(k) is somewhat similar to other streamline loans with some exceptions. There is a minimum loan amount of $5,000 and a maximum of $35,000. These amounts can be added to your mortgage whenever you make improvements such as weatherizing, removing lead paint, or making other improvements that don’t drastically alter your home.
With these improvements you must hire at least one contractor to do the repair work. You will not be approved for a loan if you intend to do the work yourself, unless you can prove your own expertise. Their guidelines state that you have to get an estimate that is broken down into specifics regarding the project. The contractors have to sign an agreement to do all the work specified within the time noted, and for the agreed price. All building permits must be within the law of your state as well.
FHA streamlined refinanced mortgage rates are low right now and it is a great opportunity if you can find one that works for you. Go to www.real-estate-yogi.com to learn more about your real estate financing options. Speak to an agent directly by calling 1-800-987-1397 toll free.