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Underwater In Your FHA Mortgage Loan? You Can Still Refinance

If you’re underwater in your FHA mortgage and have avoided mortgage refinancing because you don’t think you’ll qualify, here’s some good news. You can still refinance and take advantage of today’s low refinance rates even if you’re completely upside down in your existing mortgage. Here are several tips to help you refinance your existing home loan without paying unnecessary fees or markup.

FHA Sreamline Refinance

Here’s some background on the streamline refinance for your FHA home loan:

FHA has permitted streamline refinances on insured mortgages since the early 1980’s. The “streamline” refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must already be FHA insured.
• The mortgage to be refinanced should be current (not delinquent).
• The refinance is to result in a lowering of the borrower’s monthly principal and interest payments.
• No cash may be taken out on mortgages refinanced using the streamline refinance process.

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The great thing about FHA Streamline Refinance is that it ignores your loan-to-value ratio completely. As long as your payments are current you can be completely underwater in your mortgage and still qualify. With mortgage refinance rates hovering just over 4% you can significantly lower your payment amount; however, there is a payment strategy you need to know about that could get right-side-up in your home loan. If you continue making the old payment amount the difference between your new mortgage payment and old will be applied directly to your home’s principle balance which could get up right-side-up much more quickly.

You can learn more about taking advantage of today’s historically low refinance rates without paying lender junk fees by checking out my free Underground Mortgage Videos.

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