New changes to the FHA streamline refinance program have just gone into effect, so is this a great mortgage option for you or just more hype for homeowners?
The new changes to the FHA streamline refinance program are designed to make it possible and more attractive for homeowners to refinance their mortgage loans so that they can enjoy today’s incredibly low interest rates and better afford their homes.
Previous attempts at this have obviously failed miserably as increased costs eliminated savings to borrowers or even required them to bring thousands of dollars to the closing table.
Thankfully the new changes to MI (mortgage insurance) rates allow those who took out their current mortgages before June 2009 to keep their MI rates the same and save thousands of dollars over what they could have a month ago. However, this is only for those with FHA loans right now.
Other great highlights of the program are supposed to include no appraisals, no employment or income verification and no credit reports being required providing borrowers have a good 12 month mortgage history and are current on their payments. Unfortunately as the FHA does not directly make its own loans scared lenders are being made the scapegoats for borrowers still being required to meet minimum credit score, income and employment guidelines.
For those who do qualify this could be a great move for lowering mortgage payments and freeing up more cash every month. However, this is not a solution to stop foreclosure if you are already in trouble. If you are already behind on your mortgage payments then a loan modification with principal reduction may be a better bet. If no loan mod is possible or you are just desperate to sell and get a fresh start then consider a short sale and selling your home for cash.
