An FHA Streamline Refinance mortgage offers FHA borrowers a fast and easy way to refinance their FHA Florida mortgage to take advantage of today’s low interest rates. As of January, these refinances are even easier and less expensive than before, since the FHA has eliminated its “double-interest” rule.

What is a Streamline Refinance?

Reserved solely for homeowners with FHA mortgages, FHA Streamline Refinances allow these homeowners to refinance without complicated qualifications. Most of the typical verifications, including employment verification, income verification, and credit score are not required for FHA Streamline Refinances. Furthermore, you don’t need a home appraisal.

The main qualification is a perfect three-month payment history. You also have had to make at least six mortgage payments on your current FHA loan. Finally, the Streamline Refinance must have a Net Tangible Benefit for the homeowner, which is defined as reducing the mortgage payment by five percent or more.

In other words, you can have no income, a poor credit rating, and have no home equity, and still qualify for a Streamline Refinance as long as you’re currently making your mortgage payments on time. The reason for this is that the FHA doesn’t actually lend money – it insures loans against default. By helping you lower your monthly payments, despite your circumstances, the FHA makes it easier for you to stay current with your mortgage.

No more double interest

Previously with Streamlined Refinances, the FHA allowed the holder of the old mortgage to charge a full month’s interest when the homeowner made his or her payment at the beginning of each month. If your refinanced mortgage closed in the middle of the month, the old mortgage holder got to keep those funds. Of course, the new mortgage holder also started charging interest immediately, which meant you could pay double interest on the overlapping period of time. On some mortgages, that could amount to hundreds of dollars. Mortgage holders then tried hard to close Streamline Refinances at the end of the month to avoid double interest.

Now, though, interest is paid only on the days covered by the old mortgage. So if you get a Streamlined Refinance in the middle of the month, you’ll pay half a month’s interest on the old mortgage, and half a month’s interest on the new mortgage.

Find out if an FHA Streamline Refinance can help you

If you’re an FHA Florida mortgage holder, contact us at Embrace Home Loans to see if you can benefit from a Streamline Refinance. Currently, FHA mortgage rates are at all-time lows, and Streamline Refinance loans can close very quickly, often in 20 or fewer days. Call us at 800-333-3004 ext. 3560 or browse our website to see if we can save you money on your monthly payment.