Dispelling The Myths: FHA Streamline Refinances are Not "Free"

Oh, you will certainly encounter brokers and even lenders who tell you they are going to do it for free but I'm confident that you are smart enough to guess there is a catch. What the catch is depends on the person making the statement. If what they mean is they will make enough commission from your FHA streamline refinance to pay the costs for you or if they mean they will roll the costs into your loan so you will not have any out of pocket expense then they are simply being dishonest.

If they expect you to think they will work for free then they are calling you a fool ... maybe even an idiot.

So how are you to know?

There are simple litmus tests to tell if you are getting the best deal for your situation. Always compare the following:

1. The interest rate - this can be "faked" so also check

2. The Annual Percentage Rate (APR) - this is often how the interest rate can be manipulated

3. The discount points - this is how the rate is bought down to a lower level

4. The loan amount - if your loan amount is increasing this is how some or all of your closing costs are being paid

Keep in mind that none of these tactics are "bad" or "against you" unless the lender/broker/loan officer tells you they are doing your FHA streamlined refinance for "free".

Chances of finding a lender to work for free are about as high as finding a checking account that just gives you $3000 for no good reason.

Ken Cook 866-946-0120 extension 101

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