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The FHA Streamline refinance allows a homeowner to refinance their mortgages to more favorable rates and terms. You don’t have to be facing foreclosure to be eligible for a FHA Streamline refinancing. According to HUD, following are the basic eligibility requirements for this loan:
- The mortgage to be refinanced must already be FHA insured.
- The mortgage to be refinanced should be current (not delinquent). FHA looks at your past 12-month record on mortgage delinquencies.
- The refinance is to result in a lowering of the borrower's monthly principal and interest payments. But, if you have enough equity, you may be able to fold your 2nd mortgage into this single, low-interest loan.
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
- You must have opened the loan at least 6 months prior to the refinance.
The FHA Streamline typically does not require an appraisal, credit check, income verification, employment verification or underwriting fee. There is usually very little paperwork involved with this loan, so the costs are generally low. But, the savings can be quite high, depending on your former interest rates.
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