Streamline rate reduction programs
Starting November 17, 2009 there will be some major changes introduced to FHA Streamline loan guidelines. We will post updates here.
“Streamline” loans or IRRRL (Interest Rate Reduction Refinancing Loan) are “simplified” versions of their more complicated “full doc” FHA and VA programs. FHA and VA refinance Streamlines were created as a simplified “Rate Reduction Programs” to borrowers that already hold higher rate FHA and VA loans. Because lowering their mortgage payments helps homeowners to retain home ownership in these economic conditions and “puts additional money in their pockets” it is a part of a stimulus approach to the housing problem. Streamline refinance process is so simplified that homeowner can with minimal qualification, in most cases without money out of pocket and literally within days start saving every month on their mortgage payments. Through Streamline rate reduction program homeowners can benefit in a few ways:
- Reduce interest rate (and to have lower monthly payment),
- Reduce mortgage term - for example from 30 years to 25 or 15 year mortgage,
- Improve terms of the mortgage - for example refinance adjustable rate mortgage to fixed rate.
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Like with all types of loans - with streamline loans no different and there are some costs involved. The good news - they tend to be lower compared to “traditional” refinances. So like with every other loan type you have to decide if cost associated with lowering your rate or term is worth to you. Ask yourself: how long you will stay in the property, and that’s usually a good starting point to see if these costs can be recouped and become real savings to you. Lowering the rate and loan term is not the only benefit with FHA and VA refinances. They improve your resale chances because they are ASSUMABLE and after refi - they are very attractive because of historically low interest or shorter term on the mortgage. New buyer naturally would have to go through the qualifying process but how much headache can be saved. In a few years when mortgage rates start to go up this point will be more and more emphasized in home sales.
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Start your streamline refinance in 3 easy steps:
We will contact you within 24 hours and provide you with quote so you can make informed decision.