Besides lowering your rate, there are a number of benefits of choosing an FHA streamline refinance over other types of available refinance programs. Here are some of them.
FHA lenders are only concerned with your mortgage payment history, so if you opened extra debt since you bought your home, you won’t have to worry about qualifying with the new monthly payments. Even though there is no full credit check, your credit score will have an impact on the interest rate you are offered. The lower your credit score is, the higher your interest rate will be.
If your income or job situation has changed since you took out your first loan, it won’t affect your streamline refinance. Lenders may still verify that you are employed, but you will not be required to provide any income documentation.
Unlike most refinance programs, your home’s value makes no difference with an FHA streamline refinance. Because no home appraisal is required, you won’t have to worry about what home prices are doing in your neighborhood.
Because FHA streamlines don’t require an appraisal, and only a little documentation, your total closing costs are lower. Appraisal inspections on regular refinances often cost $300 to $400, and the underwriting fee is often double the cost charged for a streamline refinance.