What Is a Streamline Refinance?
Brett heard about a streamline refinance, where he can lower the rate on his FHA loan. Should he do it?
QUESTION: Brett and his wife are in an FHA mortgage and paying private mortgage insurance. He heard about the streamline refinance that could save him a full percentage point. Should he do this? Dave tells him what a streamline is, and what’s even better than that.
ANSWER: You can lower your rate more than that with a straight refinance. If a streamline saves you 1%, then a straight refinance will save you about 2%. Streamline just means all the fees are built in and they jack the rate to cover it. I would straight refinance and pay some small closing costs for that.
The good news about the streamline is that it’s non-qualifying. If your credit is dinged up or your house has gone down in value, you could streamline the crap out of that thing and still save on the interest rate without having to go through the appraisals or looking at your credit if something was dinged up. But if you qualify, I’d consider doing a regular refinance in most cases. But do the math and compare the difference.