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         FHA Streamline Refinance Loan         

The FHA streamline refinance loan program is available to homeowners that currently have a FHA loan. There are tow versions of the FHA Streamline Loan.  The first is the simplest and least costly. It is called a FHA Streamline loan  without an appraisal.

FHA Streamline Refinance Loans

FHA streamlined loans emerged onto the mortgage scene in the early 1980's. Since then, thousands of FHA home owners have utilized this program to lower their interest rate with fewer costs and relative ease.  

A FHA streamlined refinance loan refers only to the amount of documentation and underwriting that is conducted on a loan file by the mortgage company. Mortgage companies may offer  streamlines "no cost" (actually no out-of-pocket expenses to the borrower) by charging a higher interest rate on the new loan. Other companies may offer a streamline refinance that wrap the costs into the new mortgage amount. Unfortunately, there must be sufficient equity in the property. Before deciding which option best fits your needs, it is important to weigh not only the costs but also the long term impact that a higher rate or a higher mortgage payment will have.

FHA streamline refinance loans with or without and appraisal, do not require full credit underwriting.  As of September 18th, HUD and Lenders have adopted some provisions regarding prior mortgage late payments.   New individuals may be added to title on a streamline refinance without credit review. Deleting individuals from title on a streamline refinance may require qualification (certain exceptions may apply).

The following are basic requirements of an FHA streamlined refinance:

Borrowers who refinance their delinquent non-FHA ARM loan into FHASecure and subsequently wish to refinance to another FHA-insured mortgage must use a refinance product that requires full qualifying, e.g., a rate and term refinance.  Once the FHA-to-FHA full qualifying refinance is insured, these borrowers will be able to take advantage of FHA’s Streamline Refinance program.

  • The mortgage to be refinanced must already be FHA insured and the borrower must have made at least 6 payments on the current FHA Loan.

  • The mortgage to be refinanced (if less than 12 months old) the borrower must have made all mortgage payments in the month due (no delinquent payment of 30 days)

  • The mortgage to be refinanced (if greater than 12 months old) not have more than 1x30 days late in the last 12 months AND made all payments within 3 months of the application within the month due (i.e. no 30 day late's in the last 3 months)

  • The refinance must lower the TOTAL mortgage payment of the previous mortgage by 5% if going from Fixed rate to a Fixed rate.  Special conditions apply when going from ARM to Fixed, Fixed to ARM or reducing the Loan Term.

  • The borrower may not receive cash from loan proceeds in excess of $500.

  • Any Assets need to close must be Verified.

  • The Lender must certify to HUD that the borrower is employed and has income at the time of the application.

  • Any subordinate financing may remain in place as long as it is subordinated on title and does not exceed 125% Combined Loan to Value (CLTV).  For Streamlines w/out an appraisal the value is based on the original appraised value from the prior Fully Underwritten FHA loan.

  • The term of the new mortgage must be the lesser of 30 years or the unexpired term of the mortgage plus 12 years.  A borrower cannot refinance from a 15 year loan to a 30 year loan.

  • An appraisal is not required unless the closing costs are wrapped into the loan.  Streamline refinances without an appraisal are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium (MIP), plus the new upfront MIP if it is to be financed in the mortgage.

  • No termite report is required

  • The borrower cannot be late, delinquent, or in default of any federal debt.

  • Apply for your FHA Streamline Refinance Now!

    For those that wish to consolidate their bills or get cash out for home improvement, they should consider the FHA Refinance or FHA Cash Out Refinance  

     

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