Streamline Mortgage Refinancing for VA and FHA Mortgage Holders

The lending world is abuzz with talk of President Obama’s Making Home Affordable program. This new initiative will lower millions of Americans’ mortgage rates to make their monthly payments more affordable. There are other ways, however, to lower your mortgage payments. For VA (Veteran’s Administration) or FHA (Federal Housing Administration) mortgage holders, you can choose a streamline refinance.

Streamline Refinance Eligibility

For individuals with a FHA or VA mortgage, streamline mortgage refinancing is the best and easiest way to receive a lower interest rate and reduce monthly payments. To qualify for a streamline refinance, you must have a VA or FHA mortgage on which you have not made a late payment in the past year.

In many ways, access to a streamline refinance is quite simple in that you do not have to show income or assets verification, and you do not have to get a property appraisal. If you are currently unemployed, or you owe more on your home than its current market value, you may still be eligible for a streamline refinance.

How is Streamline Financing Better Than Making Home Affordable?

Given the current economic climate, many homeowners realize, to their dismay, that they now owe more on their home than the home is worth. This is known as being "underwater." Many underwater homeowners are rejected by the Making Home Affordable program, where borrowers must have a current loan-to-value less than 105%.

Since VA or FHA streamline refinancing does not require a property appraisal, the current market value of your home is not taken into consideration. With VA and FHA streamline refinancing, underwater homeowners can still refinance their mortgage.

VA and FHA Streamline Differences

Though VA and FHA streamline refinancing are quite similar, there are a couple of differences regarding home improvements.

• VA Green Friendly: Unlike an FHA mortgage holder, a VA mortgage holder can use streamline refinancing to take out up to $6,000 to make their home more energy efficient.
• FHA Home Improvements: FHA mortgage holders may take out up to $35,000 of their home equity to put towards various home improvements.

Don’t Hesitate

Since the main requirement for a VA or FHA streamline refinance is to be current on mortgage payments, the faster you learn about streamline refinancing and select a reputable lender offering the lowest rate, the better.