Generally speaking, if it makes sense for you to refinance your FHA mortgage, a streamlined refinancing process can do nothing but help you. In his discussion “Streamline Refinancing,” do I qualify for a home loan points out that “The VA and FHA streamline refinancing is an accelerated program that rewards you for keeping your loan current.”
FHA mortgages are offered by lenders licensed by the Federal Housing Authority, which is part of the US Housing Agency and Urban Development. FHA programs have existed since 1934, with the original intent to help first-time homebuyers purchase a home with a very low payment requirement of only 3.5 percent of the purchase price. In the 21st century, first-time home buyers, bad credit borrowers, investors and others with limited low-paying funds are turning to FHA loan programs.
Before deciding whether a simplified refinance is a good idea, you need to understand the basics of refinancing. Refinancing a mortgage means getting a new mortgage loan to replace your existing loan. This means weighing closing costs on a new loan against the usual benefits people are seeking with a refinance, which include interest savings and reduced monthly mortgage payments derived from a lower loan interest rate. As a general rule, if you stay in your home long enough to save more money than you pay to get the new loan, refinancing makes sense.
A simplified refinance usually means the lender is willing to reduce normal loan underwriting requirements, such as a home appraisal, to speed up the process of closing your refinanced loan. Lenders do when they are particularly comfortable in your ability to meet new loan obligations. Common requirements for an FHA streamline refinancing, according to HUD, include the mortgage being already FHA insured, the mortgage not to be late, with payments being updated, the resulting refinancing in principal and lower monthly interest payments, and no payment taken from equity on the refinancing.
Delay FHA Streamline
In essence, if you are a borrower in good standing, you are probably entitled to streamline refinancing opportunities from an FHA lender. If you decide that refinancing makes financial sense, there is little justification for not taking advantage of the opportunity to streamline. Some FHA lenders even offer opportunities to avoid paying closing costs out of pocket. Some charge a slightly higher rate instead of closing costs, while others simply incorporate closing costs into the balance of your refinanced loan. You benefit from an accelerated loan, which avoids the cost of an appraisal, and has other loan terms removed from the process.
home ownership Requirement
You must own your house outright in most cases to qualify for a reverse mortgage. Thus, to qualify in general must have equity in your home equivalent to the value of the mortgage you paid. The FHA considers the current value of the home when determining how much of a reverse mortgage you qualify for, so the amount of your loan can not be equivalent to the equity you are carrying at home.
If you have not paid your first mortgage, you must be able to repay the help of reverse mortgage funds to qualify. So, if your home is worth enough, you may qualify for a reverse mortgage, even if you do not have full equity in the home or even any equity. For example, if your home is worth $ 120,000 and you have a balance of $ 100,000 left on your mortgage, you could qualify for a reverse mortgage if you qualify for a large enough loan to pay the $ 100,000. that you must.
When evaluating your reverse mortgage application, the FHA considers a number of factors, in addition to the value of your home and your equity status: your age, current interest rates in your area and Mortgage Loan Insurance Contribution Rate. You must be 62 years of age or older to qualify for a reverse mortgage. The older you are, the longer a loan you are likely to get – however, if you and another borrower apply together for a reverse mortgage.
No matter how fair you have in the house, you should think before you apply for a reverse mortgage. Reverse mortgages become payable as soon as you stop using the house as your primary residence. So, if you become too sick to take care of yourself or decide to move to get closer to your children or grandchildren, your reverse mortgage will become due immediately. In addition, if you live in the house until the end of your life, your heirs may have to sell the house to pay off the reverse mortgage. So, if you want to leave your home for your family, you should not get a reverse mortgage.