Is FHA streamline assistance program legit?

While it might sound too good to be true, the FHA Streamline Refinance is a perfectly legit refinance loan backed by the Federal Housing Administration. It can offer a simplified, low–doc application process and below-market rates.

What happens if you go underwater on mortgage?

What Does Underwater Mortgage Mean? An underwater mortgage, sometimes called an upside-down mortgage, is a home loan with a higher principal than the home is worth. This happens when property values fall but you still need to repay the original balance of your loan.

How can I get out of my underwater mortgage?

What Are Your Options if Your Mortgage Is Underwater?

  1. Option 1: Stay in your home and work to build more equity.
  2. Option 2: Refinance your mortgage.
  3. Option 3: Sell your house and use your savings to pay the amount you still owe.
  4. Option 4: Sell your home through a short sale process.
  5. Option 5: Foreclose on your home.

Will anyone refinance an underwater mortgage?

“Banks typically want to secure their interest with some amount of home equity, so it’s typically not possible to refi an underwater mortgage.

What are the disadvantages of FHA streamline?

FHA Streamline Refinance Drawbacks

  • Only available to current FHA borrowers.
  • Must pay UFMIP and other closing costs.
  • UPMIP is the only closing cost you can finance.
  • New mortgage can’t be larger than current mortgage.
  • Cash back limited to $500.
  • Won’t eliminate MIPs.

Does FHA Streamline get rid of PMI?

These FHA mortgage loans are not eligible for automatic mortgage insurance cancellation. To stop paying mortgage insurance premiums you’d need to refinance out of your FHA loan. The good news is that there are no restrictions on refinancing out of FHA into a conventional loan with no PMI.

What if my home loan is more than I need?

You may have to pay a certain percentage as a fee for the unused funds if you haven’t used the funds for at least 6 months. You’ll be pay a higher interest rate for the idle funds. Your ability to borrow additional funds in the future could be difficult depending on how much extra you borrowed for the home loan.

What to do if you owe more than your house is worth?

If you owe more than a house is worth and want to sell, but aren’t sure what to do, here are six options.

  1. Stay and Pay. There are several reasons you might choose to keep making the payment on a house, even if you owe more on it than it’s worth.
  2. Refinance.
  3. Get a Loan Modification.
  4. Go for a Short Sale.
  5. Walk Away/Foreclosure.

What credit score do you need for FHA streamline refinance?

640
Minimum credit score A standard minimum credit score for the FHA streamline refinance program is 640. However, some lenders may allow a score between 600-620.