A mortgage represents a loan or lien on a property/house that has to be paid over a specified period of time. Think of it as ones personal guarantee that will repay the money, borrowed to buy a home. Mortgages come in many different shapes and sizes, each with its own advantages and disadvantages.
An FHA mortgage loan is a Federal Housing Administration mortgage insurance backed mortgage loan, which is provided by FHA-approved lenders. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium (MIP) equal to a percentage of the loan amount at closing is required, and is normally financed by the lender and paid to FHA on the borrower’s behalf.
The FHA Streamline refinance is a special refinance program that was designed by the Federal Housing Administration (FHA) in the early 1980s. The FHA streamline program allows existing FHA borrowers to take advantage of lower rates, when available, without many of the traditionally underwriting requirements. FHA streamline refinance transactions are still subject to the same title fees, closing costs and other typical costs associated with a refinance, unless the lender makes other exceptions.
Just like interest rates from other mortgage products, the FHA streamline rates change every day. The FHA streamline program is designed to allow borrowers that are currently in an FHA loan to take advantage of lower interest rates when they are available. These interest rates are available in two forms. One is fixed rate and another is adjustable rate. The borrower may refinance from an adjustable rate mortgage to fixed rate.
