Do you have an FHA loan? Would you like to lower your rate or change your loan term? Has the thought of sending in pages and pages of documentation and getting an appraisal done been stopping you? I’ve got some good news.
If you have an FHA loan and you’re looking to change your term or lower your payment, you may qualify to refinance with an FHA Streamline.
The FHA Streamline has a number of benefits. It’s also a great time to refinance in general, as rates are at or near historic lows. They probably won’t get much better than they are right now anytime soon.
FHA Streamline Advantages
If you have an FHA loan, a Streamline enables you to take advantage of a lower rate or change your term as you would with any other refinance option. However, when you do an FHA Streamline, there are additional benefits that aren’t available on many other loans:
- As with other FHA loans, you can qualify for a Streamline with a credit score as low as 580.
- Less documentation is required since you already have an FHA loan that you’ve qualified for.
- In certain areas of the country, an appraisal may not be required.
- You may be able to refinance with this option even if you owe more on your home than it’s worth.
In addition to helping you lower your interest rate and change your term, a Streamline may very well help you lower your mortgage insurance rate.
Why Refinance Now?
Rates are low right now. How low are they? Let’s take a look at an example.
Let’s say your rate was 4.25%. That’s a pretty good rate, but rates right now are sitting even lower, around 3.5%. On a 30-year FHA loan with a $150,000 loan amount, you can save $64.34 per month. And that’s before any mortgage insurance savings.
Rates are even better if you change your term. FHA Streamline rates for 15 years are around 3.00%, with minimal prepaid interest points. To put that number in perspective, over the course of 30 years at a 4.25% interest rate on a $150,000 loan, you pay $115,647.47 in interest. By switching to the lower rate and shorter term outlined above, you save more than $79,000 in interest over the life of the loan.
You can try out your own rate and term scenarios using our amortization calculator.
Does this sound good to you? You can check out more information and get started on our FHA Streamline page or by calling (888) 728-4702. And don’t hesitate to leave your questions in the comments.
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