This is correct, you roll the fees into the mortgage (the Mortgage Insurance Premium of 1.75% you paid in the beginning turns into a 1.5% MIP).
Unlike a regular refinance (where you skip a month's payment), you bring your next month's mortgage payment to help close the loan. You would be bringing that money to pay your existing mortgage anyway, so that's why it's "no cost".
There isn't any real con to the program except that you have to be on time with your FHA mortgage (at least 6 months). The program is through HUD (a government organization) and it's one of the few "no income, no assets, no appraisal" loans nowadays.
The benefits are 50-200 dollars a month off the monthly payment for practically doing NOTHING. These savings = tens of thousands of dollars off the life of the loan (or more depending on other factors).
I'm a Loan Officer (no broker fees) with Mason-McDuffie Mortgage Corporation. We've been around since 1887, and specialize in FHA. Licensed in 22 states.
If you want more info on the Streamline and the rate and payment you can get, give me a call at 927-771-8900 extension 160. (Leave a message with your contact info as well b/c sometimes we are quite busy.)
· 1 decade ago