Buying a home is always a dream that many people harbor at some point in their lives unless they are lucky enough to have inherited a home from someone. As much as some people may be able to acquire a home from gifts or simply to pay for their in cash, a good number of home owners actually have to get some loans in order to finance their home purchase. It is in this aspect that some people are compelled to use FHA streamline refinance options.
One thing that everyone has to understand is that there are rules that one has to meet to qualify for this kind of financing. This means that if you intend to benefit from this plan, you have to understand the requirements to avoid disappointment. It should be noted that this concept was introduced into the systems at around the 1980s and has retained an option for many who qualify to date.
One major aspect that everyone has to take note of is that you can not qualify for the refinancing loan if you do not reside in the property in question at the point of application. The true meaning of this form of loan financing is that it relies heavily on the underwritten value by the mortgage company despite the company has the right to determine the interest rates on the new loan that you may get to service the existing one.
There are cases where the persons in whose name the mortgage is underwritten may default in their payments of the loans. This often may attract some kind of penalies but under this new system, there are several options that can help someone who is in this tight spot to overcome the situation.
For starters, it is now possible to introduce new names into the title in the course of the refinancing loan. This gives the holder of the title an opportunity to look for variable ways of funding for the loan. Insurance however is a must in order to qualify for any other loans.
The interest payable on the already existing loan always plays a major role in determining whether you will qualify for the loan. It is mandatory that the second loan must have lower interest rates otherwise it will not be approved. If the new loan has a higher interest rate than the existing one, it means there is absolutely no need for it.
This is mainly because it would not make sense to look for a higher interest earning loan loan when you are already applying for the same because you have been unable to service the first one. This would be tantamount to committing financial suicide as chances of losing the house completely are even higher.
It is important to note that the number of years for servicing the FHA streamline refinance loan is also limited to less than 30 years which should be the maximum for the first loan and a bonus of another 12 years top add on. Anything beyond this limits is not acceptable.