Streamline Mortgage Refinancing Saves Homeowners Money
Homeowners with a VA or FHA loan can take advantage of streamline mortgage refinancing which allows home owners to refinance without having to pay transaction fees. Many mortgage holders are unaware of this characterize because many people are unaware of stream line refinancing let alone know if they qualify. Interest rates are at historic lows which method that it is a good idea to look into any kind of loan refinance.
The advantage for some people looking to use a streamlined refinance option is that there are no credit checks involved. There is no income verification required for homeowners looking to use the streamlined refinance option and there is not character appraisal fee involved. Another advantage is that there are no transactional fees included in a streamlined refinanced loan that are tacked onto the loan.
There are some conditions that homeowners must meet in order to use the streamlined loan course of action. The refinanced loan rate must be lower than the homeowner’s current interest rate paid on his current mortgage. The homeowner is not allowed to take equity out of his home, for example to pay off his credit card debt, when he is using the streamlined loan application course of action.
Homeowners cannot have any late payments in the twelve months prior to applying for a streamlined mortgage refinance. Although the home owner’s credit report is not taken into consideration he nevertheless has to be current on his loan payments. Refinancing a home loan is a sound move for those who have an adjustable interest rate loan.
The advantage of variable rate mortgage loans is that the variable allows people the opportunity to get financing when they otherwise would not be able to qualify for a home loan. But variable home loans favor the lender and not the homeowner because the interest rates tend to go up every quarter. consequently the sooner a homeowner can change to a fixed rate mortgage the more money the homeowner will save in the long term.
The attractiveness of a variable loan is that it allows homeowners to pay a comparatively loan rate at the beginning of the loan but the rates increase shortly thereafter. However, people who have a fixed rate need not worry about their monthly payments increasing for the life of their loan. A fixed rate allows homeowners to better plan for retirement than a variable home loan because homeowners are better able to budget their money.
The country is nevertheless reeling from the home foreclosure crisis which was in part due to people taking variable rate home loans and then not being able to pay their monthly payments are their rates increased. Homeowners who have a fixed rate do not have to worry about their monthly payments increasing so they do not have to worry about not being able to pay their monthly payments as long as their income remains stable. A streamline refinance allows a homeowner to switch to a fixed home loan without having to file mounds of paperwork or to pay transaction fees.
Homeowners, especially those with a variable home loan, should think about mortgage refinancing if the new home loan offers a lower rate of interest. People who have a VA or FHA home loan can use the streamline loan course of action which does not take into account credit history and does not include transaction fees. People who do decide on the streamlined loan course of action cannot however pull equity out of their home if they want to pay use their equity to make a major buy or to pay off credit card debt.