There are a lot of factors that you need to take into consideration as a business owner. You have to deal with the harsh reality of living on a variable income. This is one reason some entrepreneurs struggle to buy a house and own a business at the same time.
You need to be as prudent as possible with your money when you are a business owner. This means that you should refinance your home to get the best rates, so you can minimize your monthly payments. This makes it easier to reinvest your money back into your business.
If you’re interested in an FHA streamline refinance loan, you’ll need to be aware of any requirements you need to meet for approval. There are some basic requirements you’ll have to meet before you can take advantage of current FHA streamline rates.
The following are five requirements you’ll have to meet to qualify for an FHA streamline refinance loan. This will make it easier to grow your business when you save money.
Being current on your mortgage loan and on time with recent payments
One of the main requirements is that you must be in good standing with your existing mortgage. This means that you must have made all payments on time over the previous six months. Over the previous 12 months, you can’t have more than one payment that was over 30 days late.
Having owned your home for at least six months
Another requirement is that you must have owned your home long enough to qualify for an FHA streamline refinance loan. To qualify, you have to have owned your home for no less than six months.
Paying all closing costs upfront
An FHA streamline refinance loan will come along with some closing costs. You typically will need to pay these costs to qualify for this type of refinance loan. In some cases, you may be able to work with a lender who will pay these costs for you. However, in general, the borrower is required to pay these closing costs upfront.
Being employed and/or having some verifiable income source
You’ll have to meet some general income requirements so that you can qualify for an FHA streamline refinance loan. If your income comes from employment, this income will need to be verifiable. Most likely, you’ll be asked to show documentation of all of your income when you apply for a refinance loan.
Purchasing mortgage insurance
Mortgage insurance is a necessity if you want to take out an FHA streamline refinance loan. You’ll have a mortgage insurance premium that you’ll need to pay every month. This type of insurance is required to protect the lender.
Mortgage insurance provides protection for your lender if you are no longer able to keep up with mortgage payments and default on your mortgage loan. You can usually only avoid mortgage insurance when you take out a mortgage loan if you have a conventional loan and if you meet certain equity requirements.
If you can meet the requirements listed above, you may be able to qualify for current FHA streamline rates. FHA streamline refinancing is a great way to recover from an underwater mortgage.