A tool that estimates the potential new mortgage principal under a Federal Housing Administration (FHA) Streamline Refinance program. This calculation typically considers the existing mortgage balance, allowable upfront costs associated with the refinance, and any applicable funding fee. The result offers an approximation of the total loan amount the borrower might qualify for under the streamline refinance program.
This estimation tool plays a crucial role in the initial stages of the refinance process. It enables homeowners to quickly assess whether a streamline refinance aligns with their financial goals by projecting the new loan amount and its implications. By understanding potential costs and the resulting loan balance, borrowers can make informed decisions. It streamlines the decision-making process, allowing borrowers to ascertain if they qualify, and understand potential savings and the financial impact of a streamline refinance before committing to a formal application.