The federal government shutdown in 2013 made people in Utah frustrated. Thousands of employees from the governor’s office alone faced unpaid furloughs. Fortunately, it did not affect the bulk of home loans in the state during that time.
The Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Urban Development, was still able to process loans. The agency, in its commitment to help, continues to offer low down payments, low closing costs, convenient credit qualifying, and a 2-day streamline refinancing.
What does streamline refinancing mean?
Refinancing means you settle your existing mortgage and then create a new loan. You may also combine an existing mortgage with a new one. An FHA-backed mortgage qualifies for this kind of refinancing.
Its Pros and Cons
Before considering one, it is good to check how it can benefit you and what will it cost. Here are some pros of refinancing:
• Reduced rate and amortization
You have the option to choose a reduced rate, thus lowering your monthly amortization.
• Adjusted payment terms
With reduced rates and amortization, feel free to either extend the length of your loan or expedite its settlement.
• No need for another appraisal
For a streamlined refinancing, mortgage companies will use the original appraised value when you first sought financial assistance for your home. Though you don’t need to have the property re-appraised, City Creek Mortgage says you need to meet the debt to income requirements.
The process may also have its cons, such as the following:
• Repayment for upfront mortgage insurance
You will need to pay the upfront mortgage insurance and shoulder the mortgage insurance premium, which increases your monthly amortization.
• Uncovered Closing Cost
This type of refinancing does not cover closing cost. However, FHA may offer to finance it indirectly using seller concession. You may pay it in cash or get it financed by other lenders.
Refinancing may be necessary in certain situations. To lower your mortgage rate and enjoy your property without worrying about your finances, make sure you get the best terms from lenders.