Is an FHA streamline refinance legitimate?

I have an FHA 30 year fixed mortgage currently at 6.5% and there’s a bank that wants to do a streamline refinance with me to 5.5% at no cost to me, no income, credit, or appraisal needed either. Is this a good deal?

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3 Responses to 'Is an FHA streamline refinance legitimate?'

1. Expert Realtor - December 12th, 2009 at 12:51 pm

   Woah…they aren’t going to do it for free.

   Some of those expenses won’t be charged b/c they are not needed, but there IS a cost associated with it.

   Don’t confuse “no out of pocket” as being the same as “free”.

   They are going to roll the costs back into the loan.

2. Irish Eyes - December 13th, 2009 at 5:47 am

   It is a legitimate loan and it is cheaper, but it is not without any cost. They may be rolling the cost into the loan. If that’s ok with fine, but if you don’t want to pay 30 years of interest on a few fees then I would ask them to give you a Good Faith Estimate with the fees on it.

   The purpose of a FHA Streamline is less paperwork and a quicker loan. They don’t ask for all of the requirements because they have already approved these things for you (When you got your original loan).

3. Rusty - December 13th, 2009 at 10:39 am

   Rhere is an FHA streamline refinance with few requirements, there is one hard and fast requirement and that is that you have had no lates, none, on your present mortgage. I doubt there is no cost too you but under the FHA streamline refinance the costs are no where near a full blown refi. The big problem with your plan is that is not worth the monthly savings on your payment to only drop your interest rate by 1% . A reputable lender would have told you the difference in your payments, which be will be minimal. The rule of thumb is that the interest rate must be 2% or more to be worthwhile to re fiance. Call your lender and ask for the specif amount you payment will drop if your interest rate decreases to 5.5 or 4.5 . Chances are you can’t get 4.5 unless you pay a goodly amount of discount (the amount you pay for a lower rate. Be cautious with this lender. I worked 15 years for a major mortgage company and we always discourage our customers to not refinance unless they were lowering their interest rat by at least 2%.

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