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Originally Posted by Wag @ Mar. 21 2008, 3:29 AM Quotes are from the link you posted. Â*Confirms what I thought I knew about streamlining.
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Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. |
You actually DO pay closing costs but they are rolled up into the new principal amount. Â*The only thing you don't have to do is write a check at the signing. Â*But you DO pay the same costs PLUS you pay interest on those costs. Â*In the long run you pay more. Â*The only reason for doing the streamline is if the numbers add up to get you paying less out of pocket every month.
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This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount.[/quote]
Note, if your equity has fallen below a certain point, you may not be able to do this.
If you're planning to move in five years or so, a streamline is probably a good idea. Â*If you're planning to stay in the house for 30 years, then check the numbers.
Having said all of that, however, here's the biggest problem with a streamline: Â*It gets refinanced for an additional 30 years. Â*In other words, you start over. Â*If you are two years into your current mortgage, you MIGHT be better off sticking with it. Â*Run the numbers and find out. Â*
I'm pretty sure that they do NOT refinance and keep you at the same point of your loan. Â*In other words, if you have 26 years left on your current mortgage, they will not write the new one as a 26 year mortgage. Â*Ultimately, you'll end up paying more, again, in the long run.
Also, at some point, you may wish to go conventional, just because the interest rates are so much lower than FHA. Â*See if you qualify for that kind of loan. Â*They will roll the costs into the note too if you ask.
The trick with this kind of things is to run the numbers and COMPARE! Â*If you need help running the numbers, let me know.
--Wag--[/quote]
I have not dealt with FHA loans for a long time, but from my understanding, they have been set up recently in a way that they are very competitive with conventional Fanny Mae Programs to help out people in bad situations.