FHA Streamline Refinances "The Truth"

October 17, 2010/Scott Sheldon

There is so much confusion out there associated with getting an FHA streamline refinance.

You can still get a low Sonoma County mortgage rate by refinancing your FHA Loan. Because of the way the market is presently, borrowers have the capability of getting a no cost FHA streamline Refinance done. Most people who have FHA loans today would stand to benefit if their rate is 5.0% or higher.You must wait a period of six months from the time that you bought your home to the time that you can get a FHA streamline refinance.

You must wait a period of six months from the time that you bought your home to the time that you can get a FHA streamline refinance.

 

You have to have a 640 credit score or better in order to have no appraisal required. When you obtain an FHA insured mortgage you pay an upfront mortgage insurance premium to HUD and you also pay mortgage insurance on monthly basis to HUD. Depending on when you took out your mortgage you will get a percentage of your upfront mortgage insurance premium as a credit to the new upfront mortgage insurance premium that will be put in place for you on the new mortgage. Most folks can save upwards of $150 a month on these loans so it makes sense. When we set up the new mortgage you will receive a loan disclosure package which will show the new loan amount as well as cash to close. The cash to close is comprised of interest and property taxes to set up a new impound account. Usually it’s right around your mortgage payment to close escrow so there is no disturbance to your monthly cash flow or to your savings. We set up a new mortgage impound account for the new lender and you will receive a credit back for whatever amount of money is in your current impound account thereby getting a reimbursement. FHA Loans help the First Home Buyer get into a house.
You can get your low rate Sonoma County Mortgage. Email Scott.Sheldon@nafinc.com or call me Scott Sheldon Senior Loan Officer at (707) 217 4000. Call Scott Sheldon for an FHA Streamline Refinance Today!

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RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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3 Comments

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