February 8, 2021
Do you need to consider refinancing your current FHA home loan?
Interest rates are still very low in the earliest weeks of 2021 and while there is no guarantee mortgage rates will remain quite this low for the duration of the year, now is a great time to consider your options for a lower mortgage payment via an FHA Streamline Refinance loan.
Interest rates in the opening weeks of 2021 are still at the time of this writing below the three percent line for 30-year fixed rate government-backed mortgages such as FHA loans.
A mortgage industry company, Black Knight, has issued a report that noting that at the end of January 2021 there were some 45 thousand people exiting home loan forbearance programs and another nearly 50 thousand loan forbearance programs that were under review for extension or termination.
Borrowers who went into loan forbearance over COVID-19-related financial issues have several options for mortgage loan relief; some do not choose to go into loan forbearance but want rather to refinance their mortgages, get into a lower payment or interest rate, in order to reduce the financial pressure on their monthly budgets.
The FHA Streamline Refinance loan can help borrowers who want other options, especially in a time when mortgage rates in general are as low as they have been (historically speaking) in some time.
FHA Streamline Refinance loans are for existing FHA mortgages only–non-FHA loans don’t qualify for Streamline Refi loans.
The FHA Streamline has features borrowers should learn more about when in the market to refinance an FHA mortgage: no FHA-required appraisal, there is no FHA-required credit check.
There is also zero penalty for early payoff and in most cases the Streamline refinance must result in a benefit to the borrower such as a lower payment, lower interest rate, getting out of an adjustable rate loan, etc.
There are certain exceptions which are handled on a case-by-case basis.
There is no requirement that you maintain the relationship with your current lender in order to apply for an FHA Streamline Refinance loan.
Furthermore, Streamline Refi mortgages are not restricted to pandemic relief needs and there is no requirement that you be a first-time homeowner. All you have to do to qualify is to meet the financial requirements and have an FHA mortgage loan long enough.
What does that mean? In general you’ll have to wait six months to a year after closing a home loan before you refinance.
The FHA official site reminds borrowers that the FHA loan to be refinanced cannot be delinquent; it must be current or brought current as a condition of loan approval. Are you a borrower not necessarily worried about your ability to pay but you definitely want a lower rate or lower payment?
If so, contact your loan officer about the FHA Streamline Refinance option.
FHA Streamline Refinance loans are not new and are not a recent response to the coronavirus pandemic; some who don’t know this might otherwise make the mistake of thinking this option is only for pandemic relief.
It is not. Discuss your needs with an FHA loan officer today about your ability to refinance and how it could benefit you.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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