How a streamline refinance differs from an ordinary one

A streamline refinance is not a different kind of loan. It is the same refinance with several of the usual verification steps removed, on the reasoning that the agency already stands behind the original loan and already holds most of the file. The steps most often dropped are the new appraisal and some of the income documentation.

That is genuinely faster, and it is also the reason these routes are narrower than they sound. They generally apply only to an existing loan of the same type, so an FHA route is for a loan the FHA already insures. A conventional loan does not become eligible for one by refinancing into it first, and lenders are allowed to add their own requirements on top of the agency's.

The second thing that surprises people is cost. Skipping an appraisal does not make a refinance free: there are still closing costs, and on some routes an up-front insurance premium is charged again. Rolling those into the balance is normal and it means the loan gets larger, which is a trade and not a saving.

The useful comparison is not the interest rate on its own but the rate together with what the refinance costs to do and how long you expect to hold the loan. A lender has to give you a written estimate; two of those, side by side, answer the question better than any article can.