Let’s say you are one of the lucky ones who has an FHA loan and you are looking at the current mortgage rates thinking it may be the right time to refinance. Remember, anytime you can cut 1.0% off your interest rate, I would suggest that you owe it to yourself to examine if refinancing your loan is the right choice for you. In the case of an FHA loan, as long as you can lower your interest rate and ultimately your payments, an FHA Streamline Refinance typically makes sense.

To qualify for an FHA Streamline loan, you have to meet the following four requirements:

1. Your current loan must be an FHA loan. Sounds pretty simple. If you aren’t sure if your current loan is, message me here and I will be happy to help you figure it out.

2. You must be current on your payments. You have to be making your payments. This program is not available to those who are delinquent in any way.

3. The refinance will lower your payments and interest rate. To refinance to the same rate would be silly. The only real reason to complete a FHA Streamline Refinance is to lower your payments because…

4. There can be no cash out. You can’t do anything but pay for closing costs associated with closing your loan. This isn’t a program to get money out for a remodel or to pay for your kid’s college.

To pay for the closing costs, you can choose one of two options. You can bring the funds required to pay for closing costs to the closing, which means your principle should not go up. If you have the money in the bank, this is a great option. But if you are like most people, you should opt to pay for closing costs out of the proceeds of the loan, which means the closing costs will be rolled up into the principle of your note. So your principle will increase. Hence the reason that your payment AND interest rate will need to decrease in order for the loan to be approved.

So if you are looking to refinance your FHA loan in Utah, make sure you ask for an FHA Streamline refinance.