The FHA Streamline Refinance
Consumers with FHA loans are allowed to refinance their mortgage without having to re-qualify for the new loan (Consumers do not have submit tax returns, paystubs, W2's, etc.) or obtain a new appraisal to determine value because HUD (The Federal Government's Department of Housing and Urban Development) has already guaranteed the bank holding the FHA mortgage against loss if the consumer defaults.
Therefore, allowing the consumer to refinance to a lower payment strengthens the consumer's financial position which makes a mortgage default less likely. Additionally, when a consumer refinances, it allows HUD to generate additional mortgage insurance which helps finance HUD and keeps FHA mortgages available.
Everyone benefits from the Streamline Refinance. Consumers save tens of thousands or even hundreds of thousands of dollars in interest and or mortgage insurance and HUD generates revenue and reduces potential losses.
Streamline Refinance FAQ's
Q. Is it really free?
A. Yes. The bank will pay your loan origination fees escrow fees, title insurance costs, underwriting fee, notary fee, recording fee and in many cases even contribute money for your property tax and homeowner's insurance impounds.
Q. Why would a bank pay for me to refinance?
A. Banks make money when they generate mortgages and lose money when consumers pay their mortgages off. As consumers refinance their mortgages, banks must make new loans if they want to stay in business. This generates competition and results in banks offering money to consumers that is sued to pay the costs.
Q. Do I qualify to streamline refinance my house?
A. Qualifying for a Streamline Refinance is very easy but not everyone will qualify. You must have an FHA loan and you must be employed (or be receiving Social Security or retirement income). After those two requirements, the rest of the details will only affect the terms of your loan…not whether you can get the loan. Even if you have a previous short-sale, foreclosure or bankruptcy you can still qualify for a Streamline Refinance.
Q. How much will I save?
A. The amount an individual will save can be determined in 5 minutes with a phone call. Obviously the higher the ineterest rate you are paying and the larger your loan amount is will result in greater savings but at a minimum you will save at least half a percent and probably much more if you have not refinanced since January of 2015.
Q. I get 10 offers a day...how can I tell what is a real offer?
A. Obviously there are going to be unscrupulous people who are going to lie to you. There will be people who will send you fake offers to try to get you to call and they will use small print to deceive you. That is just a fact of life we all have to deal with in every aspect of our lives.
The problem in discerning the truth on the Streamline Refinance is that many of my clients frequently tell me that they though my offer was "too good to be true" and that kept them from calling initially. A free refinance, where my costs are paid and money is given to me to pay some or all of my tax impounds, and I get to skip two payments, and my rate is lower and my mortgage insurance rate is less, etc. etc...that all sounds too good to be true and that is a legitimate offer.
Where you can tell if the offers are fake is if the interest rate is too low because we all get our money at the same source (the sale of government mortgage bonds) and in the small print where a mortgage company can offer you an Adjustable Rate Mortgage rate but make you think it is a fixed rate. Or, they can put out a rate that only a small fraction of consumers can qualify for credit-score-wise and then when the average consumer calls in they get the actual rate.
Q. How do I get started?
A. Call us at (209) 578-9000 or email us at firstname.lastname@example.org. It takes less than 5 minutes to analyze the numbers and less than 30 days to refinance.
FHA Disclaimer: Cornerstone Mortgage is not acting on behalf of or at the direction of HUD/FHA or the Federal government.
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