Do you have an FHA loan? Have you heard of how FHA Streamlining can save you money? Probably not! It is something that has been around for awhile, but not many people are aware of it and how it can possibly decrease their mortgage payments! This program came into existence because of President George H. Walker Bush who when advised that HUDS short term delinquency was on the rise and default could occur, signed into law this provision of the housing act. Let me give you the basics… Borrowers with FHA loans can take advantage of downward movement in the interest rate anytime during the year. They have 365 chances to hit the market right! The most efficient way to streamline is without an appraisal, with no credit report required by HUD, no pay check stubs required by HUD and no bank statements required by HUD, closing costs may be financed into the loan as long as the new loan amount does not exceed the original loan amount. For those folks who wish to streamline with a new appraisal, they are required to furnish two years W2s, 30 days pay stubs and 3 months bank statements and the new loan is re-underwritten and closed. Many borrowers pay their closing costs in cash, thereby not adding a single dollar to their unpaid balance as they know they will skip a month without having to make a mortgage payment to anyone. This is what is referred to as a true streamline.
This program is saying, in effect, to any FHA customer, if rates fall lower than the rate you currently have, you may streamline to the lower rate. This was done to protect the FHA insurance fund, but it can result in a nice savings for anyone with an FHA mortgage!
