The FHA offers several refinancing options. There are FHA insured refinancing loans for those who want to get out of conventional mortgages, plus the HOPE for Homeowners program which is designed to assist borrowers who are in toxic debt because of out-of-control interest rates.

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What is an FHA Streamline Loan?

The FHA offers several refinancing options. There are FHA insured refinancing loans for those who want to get out of conventional mortgages, plus the HOPE for Homeowners program which is designed to assist borrowers who are in toxic debt because of out-of-control interest rates.

There are also FHA Streamline loans, designed for people who already have FHA mortgages. FHA Streamline loans have reduced paperwork, simple requirements for eligibility, and a list of features which makes FHA Streamline financing very attractive for borrowers.

Those features include no credit check or income verification. Since the borrower has already submitted to these qualification checks for their existing FHA loans, it’s assumed the same conditions apply for the new loan. That means that you don’t need to calculate a debt-to-income ratio for the new FHA Streamline loan, but it’s always a good idea to have a second look at your finances for your own information.

Another important feature of the FHA Streamline loan is the “no appraisal” option. Under FHA Streamline, you can choose not to have your home re-appraised. In these cases the original appraisal is used to calculate your loan amount, and the loan can’t exceed the original amount you borrowed to purchase the home. You can have the home reappraised and qualify for a higher amount if the value of the property has increased.

FHA Streamline loans don’t even require a face-to-face application process. You may be able to apply by phone or even start the initial paperwork over the Internet if your lender permits. Chances are the bank will need your actual (non-digital) signature on some documents so you will have to mail a few forms before the process is officially finished.

An FHA Streamline Refinance loan can be taken out for the usual reasons homeowners seek refinancing loans. Do you need money to start a college fund or pay down your bills? FHA Streamline Refinancing can free up extra cash for these and other projects. You don’t get any cash back with an FHA Streamline loan; the real benefit with this kind of FHA guaranteed loan is that your monthly payments are permanently lowered. The extra money you have at the end of the month can go a long way toward helping you reach your financial goals.

How you use that extra money for is up to you, but just as with your original FHA insured loan, there are some requirements. The FHA Streamline loan can only be used if the home is still your primary residence. You must be current on your original loan. If you have trouble making your mortgage payments and are trying to avoid foreclosure, an FHA Streamline loan may not be the right FHA guaranteed loan for you. If you’ve missed payments and are trying to catch up, the HOPE for Homeowners program may be a better fit. It all depends on your circumstances. If you haven’t missed any payments but fear your financial situation could change, FHA Streamline refinancing may be the right option. Ask your lender which option is best for your situation if you aren’t sure. The key is to get into the best loan for you, with the lowest interest rates and monthly payments possible.