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So many homeowners today are finding themselves in a situation where they are underwater and they can barely stay afloat. For those that have financing under the umbrella of the FHA or VA, there may be some better days ahead. If you are the owner of a home that is worth less than what you owe on the property, there may be some welcome relief in store for you through something called “streamline refinancing”.
Minimal Investigative Processing During Application
The single biggest relief this provides homeowners (other than there being lower payments at the end of the process) is that the refinancing process does not entail the same rigorous scrutiny as before when the original mortgage application was being processed. Streamline refinances offer the unique advantage of having no income, asset or employment verifications – leaving the homeowner with a lot more breathing space and flexibility. Since the program is only available to homeowners that are current and have never been delinquent on their loan, the idea is that if they are able to afford making payments at the present higher rate, they will likely be able to afford new, lower payments.
No Need For An Appraisal
The fact that these types of refinancing applications do not require an appraisal in order to be approved provides welcome relief for homeowners sitting on properties that have experienced a substantial dip in value over the years since purchase. In fact, that is one of the most prevalent reasons homeowners neglect to seek assistance in the first place.
Quick Processing With No Cost to Homeowner
The “fast” in “fast-track” comes from the quick processing of these refinance applications. Unlike the grueling process of regular mortgages, lesser paperwork plus an already-established payment history with the lender allows lenders the capability to quickly manage the paperwork and processing.
As an added benefit of the program, borrowers are able to get away with even less out-of-pocket expense when lenders either pay most of the closing costs in exchange for a slightly higher interest rate or if closing costs are rolled into the loan balance.
Program Requirements
There are some basic requirements that must be met in order to qualify for streamline refinancing and as long as the homeowner meets them there are better chances for lower payments and ultimately being able to keep their home long-term.
The mortgage must currently be insured by the FHA in order to qualify. Also, there can be no delinquency on the mortgage and the payments must be current. Finally, the borrower’s monthly principal and interest payments must be lower as a result of the refinance. Something to be aware of is that once you refinance under this program you will not be able to cash in on the equity of the home. There are other rules to be aware of as well, all accessible on the HUD website.
With this program there is new hope for countless Americans that have been struggling to successfully keep their homes afloat. Underwater properties are definitely a major concern for many homeowners that bought their properties during the real estate boom years and are enduring the harsher times of today. But with a little discipline (make sure to keep your payments current!) you can see a future with your home in it.
For more information on how you can qualify and apply for streamline refinancing, contact your Realtor today.
