Benefits of a Streamline Refinance
Aside from not requiring an appraisal, a streamline refinance takes less time to complete than a standard cash-out refinance. That’s good news if you’re still trying to get your finances in order after a bankruptcy and you’re looking to trim your overhead costs as much as possible.
Another advantage of the streamline program is that it’s possible to roll the closing costs into the loan so you’re not having to come up with a lot of cash all at once. Closing costs typically run between 2 to 5 percent of the loan value so that could potentially save you a lot of money. The only catch is that if you choose this option, you’ll have to get the home appraised.
One final benefit to the streamline refinance program is that you may be able to have part of your original upfront mortgage insurance premium refunded. If you took out your original loan before June 1, 2009, you may also qualify for a reduction in your upfront and monthly mortgage insurance premiums.
Make Getting Your Credit in Shape a Priority
Bankruptcy by itself won’t bar you from getting an FHA refinance loan but you shouldn’t neglect trying to improve your credit. A higher score means a lower interest rate so the more you do to improve yours in the months after your bankruptcy filing, the more money you stand to save on your new mortgage loan.
There’s no trick to boosting your score. Paying your bills on time, not going crazy with applying for new credit and keeping your debt to a minimum are really all it takes to see positive progress. Following these simple rules can put you on the right track to getting your refinance approved at the lowest rate possible.