Tuesday, July 09, 2013

These days, many of us are looking to pinch every penny we can.

So I read with interest a recent post by Dan Green, a loan officer who blogs on themortgagereports.com, writing about the FHA Streamline Refinance program.

Green says the FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages. He  believes FHA Streamline Refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages.

The FHA Streamline Refinance program's defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow homeowners to use their original purchase price as the home's current value, regardless of what it is actually worth today.

Green says for  the FHA Streamline Refinance program, the agency does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages.

Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty. This "appraisal waiver" has been a huge hit with U.S. homeowners, allowing unlimited loan-to-value (LTV) home loans.

Beyond this "no appraisal" feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It's available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there's no FHA prepayment penalty to worry about.

Another big plus, Green says, is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a "regular" FHA loans. There's no penalty for being underwater, or for having very little equity, and homeowners find they qualify very easily for the program.

Earlier this decade, in an effort to help U.S. homeowners, the FHA abolished most of the typical verifications required to get a mortgage. So, Green says, there's no need for a home appraisal, you can be out-of-work, without income, carry a declining credit rating and have no home equity.

Yet, he says, you can still be approved for an FHA Streamline Refinance. Learn more at http://www.fha.com/fha_streamline_refinance.

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