You may be able to refinance your mortgage without verifying your qualifying information again if you bought your home with an FHA loan. The FHA streamline refinance is an easy and fast way for borrowers to refinance.
What is the FHA Streamline Refinance?
The FHA streamline is an opportunity to refinance the outstanding principal balance on your current loan to lower your rates and/or change the terms of your loan.
The streamline refinance has only two requirements that must be met. First, you must show proof that you will benefit from refinancing. Refinancing can be costly, and the FHA wants to protect you from these costs. These benefits include a better mortgage term, a lower interest rate, or a fixed loan instead of an ARM loan. If you do not benefit from streamline refinance you will not qualify.
The second requirement is your mortgage payments for the previous six months must have been made on time. If you have made more than six payments on your loan the FHA will allow one 30-day late payment in a 12-month period.
Is Refinancing After Only Six Months the Right Choice?
As mentioned earlier, refinancing costs money, and you need to consider if paying all the fees associated with a new loan will be worth for you. If you plan on moving in the next few years, it may not make sense to refinance just yet. However, if you are planning on staying in your home for the foreseeable future an FHA streamline loan may significantly lower your interest rate saving you thousands of dollars in the long run.
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