You’re not alone, many people are looking to refinance with an FHA Streamline Refinance Program and they all have similar questions. There has never been a better time to utilize the benefits of an Arizona FHA Streamline Refinance program.
You can benefit from;
- Lower Interest Rates
- Lower Mortgage Insurance
- Lower Monthly Mortgage Insurance Premiums
Everyone is aware of the FHA Streamline Refinance Programs available in Arizona. What most borrowers don’t know is that Mortgage Insurance Premiums are changing. Mortgage Insurance is a requirement for eligibility for an FHA Streamline Refinance loan. Find out about changing interest rates too.
Information regarding the changing in guideline requirements are sometimes hard to locate. The U.S. Department of Housing and Urban Development, also known as HUD, has always required borrowers to pay up-front mortgage premiums.
Requirements for Arizona FHA Streamline Refinance
Raising Your Loan to Cover Closing Costs
HUD unfortunately, cannot allow you as the borrower to increase your balance on the new FHA Streamline Refinance Loan without first getting an appraisal. The amount of your new loan must not exceed the principal balance of your old loan. Easiest way to get around closing costs is to either be credited from your loan officer or simply pay cash.
Credit Checks & Credit Scores
Lenders have different interest rates based on whether or not you are credit qualified for an Arizona FHA Streamline Refinance loan. Ask your loan officer for details pertaining to whether or not there is a difference between the two.
The majority of lenders in Arizona will most likely require a minimum credit score for an Arizona FHA Streamline Refinance loan. The most commonly known score lenders typically start at is right around 620, some lenders may have an even lower credit score requirement, but some lenders may have an exceedingly higher credit score requirement. Some lenders may offer FHA Streamline Refinance loans with no credit score requirement at all.
Net Tangible Benefit Test
Every Arizona FHA streamline refinance loan has to pass something called the “Net Tangible Benefit Test”. The Net Tangible Benefit Test simply shows the lender whether or not your request for the loan is realistic. The main purpose of the Net Tangible Benefit is to get an idea as to whether the borrower will benefit from the transaction or not. Mortgage lenders don’t want to put their financial institutions at risk. The Net Tangible Benefit Test simply means that the benefit of doing the transaction is greater than any costs that are associated with the loan. One of the main requirement is that the principal amount, the interest and mortgage insurance portions of your new monthly mortgage payment must be lower than your previous mortgage payment by 5% or more.
Making Your Monthly Mortgage Payments
It’s very important to make all your payments, and even more important the make them on time. To be considered eligible for an Arizona FHA Streamline Refinance program, lenders require that you have 12 consecutive months worth of on-time payments towards your current loan.
Borrowers can save a significant amount on their mortgage payments and lower their interest rates, it all starts with the right lender. Shop around for a good lender, you might be surprised to find not only differences in lenders rates and fees, but also in their expertise and customer service.