For those who have VA loans or FHA loans there are several refinancing options available to you. One refinancing option that seems to be increasing in popularity is the use of a streamline loan. As the name implies a streamline refinancing option is ideally a faster refinancing option for veterans and homeowners to take advantage of.
Streamline Refinancing Defined
Streamline refinancing programs offer those who have FHA loans or VA home loans to refinance at a faster pace. Applicants have the advantage of being able to apply for the loan without having to go through traditional steps like credit check or employment verification. Utilizing the same information used to apply for the original home loan, eligible homeowners get the opportunity to take advantage of the low VA rates (for VA home loans) or low FHA rates (for FHA home loans).
Qualifying for a Streamline Loan
While each mortgage provider will vary, there are some basic requirements that must be met in order to qualify for the streamline refinancing program. Below are some of the qualifications:
- Good repayment history
- Purpose (meaning that the refinancing must save you at least 5 percent in housing costs or more)
- Must have owned the property at least 6 months
- Closing costs will need to be paid upfront
There may be other requirements so checking with your current or ideal VA or FHA mortgage provider is advised.
Reasons to Consider a Streamline Loan
Of course streamline loans are not ideal for everyone and thus you will need to determine whether or not this is an ideal option for you as you look to cut costs. Below are some reasons you might consider applying for a streamline loan:
- Living in an older home and need to make efficient repairs/upgrades
- Looking to receive a significant reduction in housing costs
- Those who have poor credit history
- Those who have recently switched jobs (as employment stability is often a factor for lenders)
- Those looking for a fast way to refinance their home
- Those looking to extend the terms on their existing mortgage
Reasons a Streamline Loan May Not be For You
When determining whether a financing option is ideal you should look at the pros and the cons. Low VA Rates, a company specializing in VA home loans points out a couple things you may want to think about before applying for a streamline loan.
- Those looking to use the equity in their home for something other than improvements
- Those looking to extend the terms of their mortgage beyond 10 years
Refinancing is one of the go to options for homeowners looking to cut costs on their investment. For those that are looking for the simplest, most cost effective way to refinance their VA or FHA loan, considering a streamline loan program might be the way to go. Shop around for mortgage lenders to determine which will give you the best option as it pertains to your financial circumstances. For those who are eligible and are looking for an expeditious way to refinance, improve their home, or reduce their mortgage payments, making the decision to use a streamline loan may prove very beneficial.