What are the benefits of a FHA streamline refinance loan?

Refinancing a mortgage is a great option for borrowers who want to refinance into a lower interest rate or monthly payment. Streamline refinance loans allow FHA borrowers refinance without the usually required appraisal or credit check. Your lender may require one or both, but the FHA does not.

The FHA streamline refi allows the lender to use the borrower’s existing credit and appraisal data to approve the loan. This can provide a major benefit to the home owner who has financial goals that include lower monthly payments.

Another benefit is that they can be used to refinance out of an adjustable rate mortgage into a fixed rate loan. FHA loan rules actually require there to be a tangible benefit for the borrower when refinancing with a streamline, and converting to a fixed rate definitely qualifies.

Remember, streamline refinancing can only be used for existing FHA mortgages. Borrowers who want to refinance non-FHA loans should explore other options.

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