An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. FHA home loans require lower minimum credit scores and down payments than many conventional loans, which makes them especially popular with first-time homebuyers. In fact, according to FHA’s 2020 Annual Report, more than 83 percent of all FHA loan originations were for borrowers purchasing their first homes.
FHA streamline is a refinancing program for current homeowners who have an FHA loan. If current FHA borrowers decide to refinance their mortgage, they can either refinance as a five-year adjustable-rate mortgage (ARM), or a 15, 20, 25, or 30-year fixed-rate loan. This program can be utilized under certain qualifications, such as:
Depending on how much money is owed, your financial situation, and how long you anticipate living in the home, it will dictate which rate option is best for you.
Most commonly, borrowers will be required to pay for closing costs when they refinance an FHA streamline. The only difference with streamline refinancing closing costs is that it does not require homeowners to pay for an appraisal. Homeowners can expect to pay between $1000 and $5000 for FHA streamline refinancing closing costs. But, keep in mind this amount could be higher or lower depending on your new loan amount, down payment, and other factors.
If borrowers were to make a down payment of less than 20 percent of the home’s value, their lender will require them to purchase private mortgage insurance (PMI). Lenders can make borrowers pay for this premium upfront and add it to their new loan estimate. This mortgage insurance only protects the lender if the borrower stops making payments.
If you are interested in refinancing your current FHA loan or have any questions, reach out using the contact information below.
Fill out the form below