Refinancing your mortgage so that it has a lower interest rate is an excellent way to reduce your monthly payment and the total amount that you spend to purchase your home. However, if the value of your home has dropped or is slowly appreciating, this can make is difficult to refinance your loan.
An alternative to explore is a USDA Streamlined Assist Refinance Loan. The USDA Streamlined Assist Refinance program enables you to refinance your loan without having your home appraised or completing an entirely new application process. Here are a few ways the USDA Streamline Assist Program can make your home more affordable.
1. The Costs Associated with Refinancing are Lower
One of the reasons the Streamline Assist program is attractive to many homeowners is that it has lower costs than other loan alternatives. When you refinance a home loan, it's common for the new loan to have closing costs. Even though these closing costs are normal, they can erode the savings that refinancing has for your budget and overall home costs.
Fortunately, the Streamline Assist Loan is a low-cost way to take advantage of better loan terms. Expect to pay one percent of your loan's balance as an upfront fee and an annual fee of 0.35 percent of your loan balance.
2. You Can Roll Any Closing Costs in Your New Loan
Even if a program has low closing costs, these closing costs may still pose an issue if you're on a fixed budget or simply don't have a lot of room in your budget. Another reason to check out a USDA streamline refinance is that it allows you roll any closing costs associated with refinancing into your new loan. This decreases the amount of money that you have to pay out-of-pocket and ensures that your refi doesn't have a temporary negative impact on your monthly cash flow.
3. Your Loan Doesn't Need to Meet Any Specific Equity Requirements
Aside from closing costs, another reason that refinancing causes some homeowners to bring money to the table is that they have to make sure the loan meets specific financing requirements to obtain the best interest rate possible. For example, with a more conventional loan program, holding a mortgage less than 90 percent of your home's value may yield a better interest rate.
However, the USDA loan program doesn't have any of these equity requirements. Even if your home has gone down in value since you originally purchased it, you can still refinance the loan so that you have a lower interest rate. Not only does this let you benefit from lower overall interest rates, but it minimizes your out-of-pocket expenses.Share
22 April 2019
When I began my first business selling sports equipment locally, I knew the sports-world well, and I knew how to run a business. One thing I did not know a lot about was the financial world. I had never applied for a loan in my life other than when I financed my car with the dealership in-house financing. My first application at a large bank was denied. I began looking into my other options, and I found that there were more lenders for new businesses than I realized. I applied at local credit unions, local banks, and other business lending services. I was able to secure more funding than I even expected, and my credit is just average. I created this blog to help other new business owners realize that there is funding out there. You just have to find it and apply! Don't give up on your dream.