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Demond Mcclellan's Blog

By Demond Mcclellan | Agent in 07087

FHA Streamline Refinancing - An Opportunity Not To Be Missed

With the US housing and construction industry  beginning to show signs of making a long  awaited comeback, many plaudits are due to the Federal Housing Authority (FHA) for the part they have played, and are continuing to play, in its recovery.

One of the principal driving forces for the improved housing market is the recently introduced FHA Streamline loans. The  Streamline  loan option  have been  specially put together  by the FHA  to provide  potential or existing property owners with a welcome opportunity  to reduce their  monthly mortgage payments through qualifying for  reduced interest rates and extended durations of payment.

However, not everyone is eligible to receive these inducements, and those who are have to meet certain criteria established by the FHA.

The criteria to be eligible to receive preferential loans are, first and foremost, to be a holder of an existing FHA mortgage, as well as having kept that mortgage up-to-date as far as monthly payments are concerned and there are no outstanding arrears.

For homeowners who are not holding an FHA mortgage but in any event would like to apply for a refinancing mortgage, then this is a definite possibility as long as the people applying for the loan follow a set of fairly straightforward procedures, as well as, meeting the criteria set by the FHA to receive any form of finance.

The first steps involved in applying for streamline refinancing loan, is to make a formal application. The applicant should able to carry out a credit check, provide proof of current employment, be compatible with the FHA’s standard debt-to-income ratio requirements as well as a number of financial considerations that the FHA are liable to stipulate.

Many homeowners, and not necessarily those in financial straits, are looking closely at the FHA streamline mortgage refinancing loan options as a way of considerably lowering their monthly loan repayments without reducing their equity that they hold on their property, simply due to the exceptionally competitive interest rates the FHA are offering at the moment.  In addition the major advantage of this program is that there is no appraisal requirement. Therefore, many applicants are approved for refinance despite being under water.

Many homeowners are also taking advantage of these loans to carry out major renovations to the property which they may have been previously unable to do as a result of the lack of desire that the US’s leading banks have displayed in recent years to lend money to homeowners in any shape or form.

The FHA has anticipated demand for home improvement loans and accordingly has instigated a special scheme within their Streamline program to meet the demand. Under the title of 203(k), homeowners who are eligible and want to take advantage of the scheme will be allowed to borrow a minimum amount of $5,000 up to a maximum of $35,000, at particularly attractive interest rates with the monthly payments being added to the existing mortgage obligations.

The only stipulation is that  the financing granted is used exclusively on modifications, and that the work should be carried out by a registered contractor, who will be obliged to provide detailed estimates to the FHA including as detailed list of the material to be used and  an accurate estimate of the number of work hours required to complete the job. Once the job has been completed and before the money is released, FHA requires that a representative of the organization visit the recently renovated building to ensure that all work has been carried out according to the agreed specifications. 

FHA Streamline refinancing program offers a great opportunity for homeowners to lower debt and improve the value of the home. This will undoubtedly continue to spur the real estate market and drive home sales.

Helping New Jersey Buyers and Sellers connect…. Reach out to me if need any real estate guidance.

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