As pointed out by other authors on this blog, interest rates have recently dropped and with the announcement by the Fed that they will be buying hundreds of billions of dollars of Mortgage Backed Securities from the GSE’s, it is generally expected that interest rates *should* trend downward for a period of time.
Falling interest rates generally mean an increase in the number of people refinancing - and over the last year or two with the dramatic increase in the number of people in FHA loans, many people can benefit from the FHA streamline refinancing program.
If you have an FHA loan and your interest rate is above 6%, you would be wise to contact your mortgage professional to see if the FHA Streamline program makes sense in your situation.
The FHA Streamline program is one of the few loan programs that are available where you can refinance and get a lower the interest rate on your home and:
- In some situations, no appraisal is required
- No income documentation is needed
- No asset documentation is needed
The main requirements for the FHA Streamline program are that (1) you have a good “mortgage rating” — meaning that you have made your monthly payments on time and are current and (2) that if you participate in the Streamline program, it will put you in a better financial situation (read: lower your interest rate).
Last 5 posts in FHA Loans
- Results of the FHA Audit - November 13th, 2009
- Fannie, Freddie and FHA Loan Limits Will Be Extended Through 2010 - October 30th, 2009
- FHA Improvements: New guidelines and Fewer Restrictions - October 26th, 2009
- Renovation Financing: Not all loan officers are created equal! - September 23rd, 2009
- FAQs on New Help for FHA Borrowers - September 17th, 2009
- Stumble it!
- Categories: FHA Loans, Loan Modification, Mortgage Rates
Comments
2 Comments so far
brian
I have a 6.375% interest rate on an FHA loan taken out to buy a house in New Jersey in August of ‘09.
I would love to lower this rate by at least a percentage point but the low prime rate is not, I am told, what I would get with an FHA loan. Countrywide, my mortgage holder, is quoting an interest rate between 5.5%-5.75% with closing costs between $3,000-$5,000.
I only have about $2,000 in equity on a $310,000 loan so that would mean I would have to come up with $1,000-$3,000 out of pocket to pay for the refinance.
I am waiting for now for a lower rate but I was also wondering about all these mailings I’m getting offering a 5% refi rate on an FHA loan. I’m skeptical but are there any reputable FHA refinancers that I should consider besides my mortgage holder?
I would definitely appreciate a decrease in the monthly payment and plan to live in the house long term so the cost savings of refinancing, even if it took 10 years to make up the out of pocket costs plus refinancing at the full price of the original mortgage, should be realized.
brian
typo, it was August of ‘08