The four properties of refinancing is another term for streamlining the refinancing process, commonly achieved through what is known as the FHA Streamline. This method of refinancing is an abbreviated version of the 203(K) that focuses on consumers who would like to refinance for repairs in homes or property. According to "Refinance: 4 Rules of Marketing for FHA Streamline Refinances," consumers should take a few but important number of steps to achieve successful loans.
Organize
Organization is key to success in many endeavors, including the refinancing process. The first step toward achieving that goal is to provide the information necessary for the underwriting process. Documentation processed by include the original FHA mortgage (including Fannie Mae and Freddie Mac) properties that a consumer wishes to refinance, or a current mortgage that shows no delinquencies, as well as no cash loans on mortgages. The streamlined process is designed to lower interest payments and monthly principal owed by the mortgage holder.
Understand the Process
The second rule requires that individuals understand basic terminology of the refinancing process in order to improve efficiency of the entire process. For example, refinancing may require expenses paid out by the property owner for closing costs while some don't. A person should know that higher interest rates may apply depending on whether or not original closing costs were paid in cash or absorbed into the original mortgage loan.
In most cases, streamlined refinancing doesn't utilize appraisals, but in such cases, loans generally don't extend past the current amount owed, while closing costs for investment properties are generally not included in refinanced or new mortgage accounts.
Get the Pros
Streamlined refinancing offers lower down payments with an average of 3 percent investment, as well as the potential to absorb loan fees into the amount financed. Such mortgages are FHA insured and general inspections are generally not required. However, consumers should be aware that the homeowner will be responsible for using the proceeds from such a loan for home or property repairs.
The last property of streamlined refinancing requires that the individual be able to adequately identify items for repair such as roofing repairs, heating, ventilation and air conditioning (HVAC) systems upgrades, installation of storm windows and doors, painting and improvements for disability access, as well as exterior improvements, such as decking.
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