Now is the time to refinance!
There has never been a better time to look into refinancing with an Arizona FHA Streamline Refinance Program. Many people are discovering they can lower their interest rates and their mortgage insurance.
Most people in Arizona have heard of the FHA Streamline Refinance Programs available to homeowners in Arizona. What is commonly misunderstood is that Mortgage Insurance Premiums also know as MIP are constantly changing as well as the interest rates and homeowners can take advantage of that, considering MIP is required for Arizona FHA Streamline Refinance loans.
Finding information about the changes isn’t always easy, but the HUD or U.S. Department of Housing and Urban Development states that it’s a requirement that the borrowers pay the MIP up front.
Arizona FHA Refinance Requirements
Closing Costs
The best way to pay for closing costs is either pay by cash, or be credited by your loan officer. Closing costs must be covered by the borrower. HUD will not allow borrowers to raise the balance of their loan to cover closing costs without an appraisal first.
Minimum Credit Requirements
Lenders will often require a minimum credit score of at least a 620. Some lenders minimum score is higher, some lower, and some don’t have a minimum credit score at all. All lenders however, have different interest rates based on whether you’re “credit qualified†for an Arizona FHA Streamline Refinance loan. Make sure you check with your loan officer for any details to pertaining whether there is a difference in rates if you’re qualified or not.
Net Tangible Benefit Test
For every FHA streamline refinance loan, it has to pass something called the “Net Tangible Benefit Testâ€. The Net Tangible Benefit Test simply tells lenders whether or not your request for the loan is acceptable. The main purpose of the Net Tangible Benefit is to get an idea as to whether the borrower will benefit from the transaction or not.
One of the main requirements is that the principal amount, the interest and the MIP portions of your new mortgage payment is lower than your previous mortgage payment by at least 5% or more.
Late Mortgage Payments
It’s very important to make all your payments on time. To be considered eligible for a Arizona FHA Streamline Refinance program, lenders require that you have 12 consecutive months of on time payments towards your current mortgage loan.
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Homeowners can save money on their mortgage payments and lower their interest rates too, it all starts with the right lender. Shop around for a lender you’re comfortable with, you might be surprised to find not only differences in lenders rates and fees, but also in their expertise and customer service.