FHA Streamline Refinance

FHA Streamline Refinance

The FHA Streamline Refinance program was designed for borrowers who have existing FHA home loans. With this program, home owners can easily refinance their FHA mortgage without requalifying. This means borrowers do not have to verify any of their assets or income. Another plus is that a home appraisal may not be required, depending on the balance of the loan. One of the biggest advantages to FHA streamline refinancing is that it allows for unlimited LTV (loan-to-value) ratio. This means that even homeowners who are very behind on their payments are able to enjoy lower interest rates.

The FHA Streamline program relies on the data from your original FHA loan. The lender will use that information and give the applicant a mortgage with a new interest rate and new terms.

Qualify for FHA Streamline Refinance

FHA Streamline Refinance is fairly easy for applicants to qualify for. Due to changes in the FHA program in the past ten years, it is much easier for buyers to obtain FHA loans. This means that you can still get FHA Streamline refinance with no income, bad credit, no home equity and be out of work. This is great for homeowners that want to lower their rates.

FHA Streamline Refinance

The FHA’s guidelines are as follows:

  • Employment verification is not required
  • Income verification is not required
  • No credit score verification is required
  • No home appraisal is required
  • Must live in the home
  • Borrowers cannot have more than 2 (30-day) late payments on their mortgage in the past year
  • FHA Streamline has not been used in the last six months
  • Although there is no credit score verification, lenders may have additional credit requirements
  • No cash out refinancing available with this program
  • Your monthly interest and/or principal must be lowered as a result of refinancing

The US Department of Housing and Urban Development (HUD) prohibits the homeowner to take equity out of their home while using the FHA Streamline Refinance program.

Qualify Streamline Refinance

Closing Costs on FHA Streamline Refinance

Even though the process is streamlined, there are closing costs involved in obtaining an FHA Streamline loan. Closing costs for a loan can usually reach into several thousands of dollars. You’ll need to pay the title company, your broker, the lender, and fees owed to anyone else involved in securing the title of the house. This includes the closing agent and any other third party services that were needed during the purchase of the home.

Sometimes borrowers will roll the closing costs into the FHA Streamline loan, but that will require an appraisal of the property and other additional requirements. If you complete the FHA Streamline Refinance without a home appraisal, you must pay closing costs out of pocket.

Closing Costs on FHA Streamline Refinance

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