In a Battle Between FHA streamline refinance with MIP vs. Conventional PMI who would win?
The Federal Housing Authority under U.S. Department of Housing and Urban Development has been allowing for streamline refinancing of FHA loans since the early 1980's. It is known as an FHA streamline refinance because there is a limited amount of documents needed and underwriting. This allows you to refinance you home loan faster and begin reaping the benefits of a reduced interest rate. If you thought applying for a mortgage was a hassle, then you'll love how easy this process is, if you've already been approved by HUD Federal Housing Administration for a government-insured loan. Why stick with your high adjustable rate? Refinancing, or FHA streamlining, can be a great option to reduce payments and insure your future.
To be eligible for an FHA streamline refinance:
- The mortgage must be current (not delinquent).
- The mortgage must already be FHA-approved.
- The refinance needs to result in a lowering of the borrower's monthly principal and interest payment.
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
If your loan is not FHA-approved then you need to consider a conventional refinance. Over the past couple years there have been many other programs created to help those struggling with their conventional mortgage to refinance. If you don't qualify for an FHA streamline refinance then look into programs like the new HARP.
Applying for an FHA streamline refinance with MIP
Those who don't want high monthly payments or would like to adjust their current mortgage rate might have found the perfect option. An FHA streamline refinance requires a credit check before FHA refinancing can be approved. Don't let this requirement scare you away. You'll be surprised to learn that FHA rules are very flexible when it comes to reviewing your credit history for an FHA refinancing loan. In addition, when choosing between an FHA streamline refinance with MIP vs. Conventional PMI an FHA loan will generally have the least amount of money required to close and will have lower payments. When refinancing with an FHA streamline you can:
- Prevent losing your home
- Help eliminate debt
- Adjust your mortgage rates
- Help to save for retirement
- Fund your child's education with new-found savings
- Make much-needed home improvements
With an FHA streamline refinance, closing guidelines will include cost of title insurance and title examination, deposit verification fees, lender's origination fee, etc. Closing guidelines for an FHA refinance may also help save you money by adding the closing costs to the total loan amount, instead of having to pay out of pocket.