FHA Streamline Refinance Questions

by William Golden from Austin, TX, USA

Hi Kate, I talked over my FHA streamline refinance questions with my current mortgage lender. I owe $158,000 on my 30 year fixed rate mortgage at 6.75 percent. My monthly house payments are just under $1500 a month with property taxes and insurances included.



I am not looking for cash out, just for a lower interest rate. We are not hurting financially, just thought we could save more.

Our current lender quoted us an FHA streamline refinance for 30 years at 4.875 percent but the closing costs are $8,200. This would bring our monthly payments down to just under $1300 a month.

We have built up about $12,000 in equity thus far so it's hard to see $8,200 rolling over into the new mortgage and losing that equity.

We are looking to stay in our current house for another 3 to 5 years. By that time, we will probably have another baby and will have outgrown our house. So will be important to us to have equity that we can take out of our current house to put it into our next house.

I have 2 questions really about this FHA streamline refinance consideration...

1-- Is refinancing a good move considering our situation?

2-- I talked to the lending company on the phone and was asked to lock in the rate, which I agreed to, and then he took my info over the phone for the application. They are sending the application to me to sign.

I have not signed anything. If I decide to back out, would you foresee that being a problem? If I was even able to back out, could that potentially hurt my credit score?

Thank you so much for all your help! William

Kate's answer: FHA Streamline Refinance Questions

Hi William, I have been asked this many times over the years and here is what I have told homeowners contemplating a refinance.

FHA Streamline Refinance Calculations

Divide $8200, the cost of the refinance, by the estimated monthly savings of $200. According to my calculations, it would take about 41 months for you to recoup the cost.

Bottom line? You have to decide if the cost of the FHA streamline refinance is worth the savings. Is 41 months a reasonable amount of time to pay yourself back? Only you know.

Mortgage Rate Lock

Since mortgage companies have varied mortgage rate lock agreements, you will need to consult their paperwork to understand your rights and obligations. Remember to get all terms of the mortgage rate lock in writing.

Mortgage rate lock is a hot subject and many Readers have written me about it, both with questions and opinions. Scroll down the page until you reach Readers' Opinions On Mortgage Rate Lock and browse through well over a dozen contributions from other Readers.

I hope you'll come back to my website again in the future. Of course, all of my information is free.

So remember to bookmark Get-Your-Best-Mortgage-Rate to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice. You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,

Ask Kate how to get the best mortgage rates
Ask Kate



P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.



Finding Help You Need for Refinancing

Refinancing Advice - Your opportunity to get down to earth refinance nuts and bolts from a mortgage insider.

Having trouble refinancing your mortgage due to fallen property values? Go to Special Edition Making Home Affordable Options.

USDA Rural Home Loan Refinance with no appraisal, no credit report, and no debt-to-income calculations.

Announcing Kate's Mortgage Information Planner - To save money, get your ducks in a row first.

Are you a homeowner trying to decide if Mortgage Refi is worth the cost?

How To Compare Mortgages - Yes it is enough to make anyone want to toss up their hands.

New! Ask Kate's secret to reducing mortgage refinancing costs. Home buyers should read this too!

Real Estate Investor Loans - Three options for investors.

Surprise, it's a barn! Is a Certificate Of Occupancy necessary for your home mortgage refinance?

Refinance With Cash Out - Where is my loan approval?

Save money using My Special Refinance Formula.

Fresh Refinance Ideas - Reasons why and why not to refinance.

Discover my Secrets To Refinancing based on Robin's story

Low Mortgage Payments For Home Owners - Learn how to ask questions and qualify your lender.

Don't be distracted by refinancing lingo. 10 best kept secrets to Low Mortgage Payments.

A collection of Ask Kate Refinancing Questions and Answers II.

A collection of Ask Kate Refinancing Questions and Answers I.



Return from FHA Streamline Refinance Questions to Get Your Best Mortgage Rate


Click here to add a comment.

You can also ask Kate about your mortgage at Refinancing Advice The Nuts and Bolts.

Recent Articles

  1. Kate's Mortgage Rate Report August 11: Rates Bouncing Like a Ping Pong Ball

    Aug 11, 16 10:49 AM

    Kate's mortgage rate report for the week ending August 11, 2016: Rates Bouncing Like a Ping Pong Ball
    Mortgage interest rates have been bouncing like a ping pong ball: After last Friday's strong job report began pushing up mortgage rates, the market is now hinting at a reversal, with the 30-year hover…

    Read more

  2. Ask Kate how to avoid unauthorized mortgage rate extension fees

    Aug 11, 16 10:18 AM

    Ask Kate how to avoid unauthorized mortgage rate extension fees
    Ask Kate how to avoid unauthorized mortgage rate extension fees:

    After locking in her rate, the bank sent a Texan homeowner, Laura, notification of several thousand in fees that she must pay in order…

    Read more