FHA home loans have a built in benefit of allowing you to reduce the interest without having to go through the expense and paperwork of the entire home loan process again.
What's the Catch?
That's just it - there really isn't one. There are a couple of things you should be aware of though.
No Cost Streamline - There are minimal costs to doing a FHA streamline refinance that the lender will pay for. The way the lender pays for these fees is by offering you an interest rate sufficient to cover the cost.
Qualifying for a FHA Streamline Refinance
Paperwork: Different lenders may or may not require all of this paperwork.
- Loan Application - This is the same application you completed last time you applied for a loan
- Mortgage payment coupon/statement - Your most recent mortgage statement
- Homeowner's insurance declaration page or agent's contact information
- Copy of Driver's License and Social Security Card
FHA Streamline Refinance Special Benefits
- No Appraisal Required
- No Income Verification
- Skip 1 Payment
- No Cash to Close (in most cases)
The bottom line on this is that there's no cost to explore this opportunity and if you cannot realize at least a .5% improvement in your effective interest rate, FHA will not allow you to refinance. Win/Win.