Refinancing FHA Mortgages

Those who hold an FHA mortgage have the opportunity of taking advantage of the ‘streamlined’ refinancing options. The FHA Streamline Refinancing allows for the refinancing of FHA mortgages with a reducing of paperwork and a speeding up of the normal approval process.

There are two types of FHA Streamline Refinancing available: those with appraisals and those without appraisals.

Refinancing Without Appraisal

This type of refinance is for those who do not want to take cash out of their equity and simply need to refinance, presumably to take advantage of lower interest rates. There is no appraisal needed to establish value of the property and no credit evaluation approval needed for the mortgage. The FHA Streamline Refinancing without approval can save you from having to re-qualify in terms of credit worthiness. The following conditions apply when refinancing under this option:

• 1. You may only refinance an FHA-approved mortgage.
• 2. You cannot withdraw any equity from the mortgage.
• 3. You must be up-to-date on your current motgage payments.
• 4. The intention of refinancing should be to lower monthly payments.
• 5. There is no requirement to verify income, net worth or employment status.

Some lenders will allow origination and closing costs to be financed with the new mortgage saving borrowers the out-of-pocket costs.

Refinancing With Appraisal

FHA streamline refinancing with appraisal is available for homeowners who wish to take cash out from the equity of their home. This option requires an appraisal assessment of the property being refinanced, and re-qualification for the mortgage is necessary. Credit history, employment records and income requirements will be reassessed upon refinancing with a streamlined with appraisal mortgage. When you take out an FHA Streamline Refinancing mortgage with appraisal, all closing costs for the new mortgage can be refinanced as well.

Why Use FHA Streamline Refinancing?

FHA Streamline Refinancing affords holders of existing FHA mortgages a quick and convenient way to take advantage of lower interest rates or to lower monthly payments. Using the convenience of FHA mortgage qualifications, the amount needed to refinance a mortgage can be quite inexpensive. If you currently have an FHA mortgage and would like lower payments or a cash amount derived from the escrow of your current mortgage, using FHA Streamline Refinancing may be the perfect solution.