The FHA streamline refinance program is an easy way for people who are currently in an FHA loan to lower their monthly payments without having to completely re-qualify for a new rate.
The main criteria for being able to qualify for the FHA streamline refinance program are:
- You must occupy the property as your primary residence
- You can’t have more than 2 30-day late payments on your mortgage in the last 12 months
- You can’t participate in the FHA streamline refinance program unless the benefits outweigh the costs — or, in other words – you had better save money and be in an overall better financial position.
How much money can you save with the FHA streamline refinance program?
How much can you save if you decide that the FHA streamline refinance program is something that you want to do? It depends on your loan amount and what your current interest rate is. Here is a simple example of what your savings could possibly be:
- Loan amount = $150,000
- Current interest rate = 7%
- Current principal + interest = $998
- New interest rate = 5%
- New principal + interest payment = $805
- Monthly savings = $193/month
When does the FHA streamline refinance program make sense? Well, if you are in a $150,000 loan and currently have a 7% interest rate, it would only make sense if you wanted to save $193/month on your mortgage payment.