If you’re asking yourself if you should apply for an FHA streamline refinance now or wait a bit, don’t worry, you’re not alone. Homeowners who are fortunate enough to have an FHA loan be it from Jacksonville, Orlando,West Palm Beach or Tampa are asking themselves the very same question. If you haven’t decided if an FHA streamline refinance is in your future, there are a few things you should do right now.
One of the provisions of this new FHA refinance program requires that there be a “tangible, net benefit” from the refinance. This means that there should be a clear, bona fide advantage for going through the refinance process. One of these clear advantages is refinancing out of an adjustable rate mortgage into the current low FHA fixed mortgage rates we enjoy today.
Another is by reducing your current fixed interest rate to a new lower one which lowers your mortgage payment. In order to find out if you qualify for this tangible, net benefit you’ll need to call your loan officer and discuss your options by comparing your current payment with a new one at today’s rates.
The next thing you should do right now is to go ahead and apply for an FHA streamline refinance. The loan documentation process, even though is truly “streamline” making for a quicker, simpler transaction, there are still important things that need to be completed prior to closing on your loan. You’ll need to have a new title report issued and your loan file will still need to have important FHA documentation in the file. This process, while faster than a standard refinance, still takes time.
And while you’re deciding whether or not to go ahead and refinance now or wait, it’s to your advantage to go ahead and get the paperwork ready now. That way, when you’re ready to lock in your rate and close on your loan, you’ll be just two to three days away from closing instead of two to three weeks.
Finally, many people who wonder if they should apply for an FHA streamline refinance might wait to see if rates will go a bit lower than they already are. And those people are not alone regardless of where they live in Florida. But if it makes sense now to refinance due to your payment being lowered beyond the tangible net benefit threshold, why wait? After all, you do in fact have a “bird in the hand” with current rates and no one knows what will be around the corner.
If FHA streamline refinance mortgage rates do in fact go down, how much further can they really go? On the other side of the coin, how high can they go up and how much higher can they go? Look at both possibilities. I think most experts agree rates will not stay at the current historic low levels forever. If you wait and rates indeed go back to their traditional levels, you lost out possibly saving hundreds each month on your mortgage payment.
FHA Mortgage Source is a leading resource in Florida for FHA loans, serving home buyers 7 days a week. Please call us at ph: 800-743-7556 to learn more.
For those homeowners with non-FHA loans ( Fannie Mae, Freddie Mac or USDA loans) and negative equity – please click submit the request form on the right side of your screen to learn about other options available.