FHA Streamline Refinance: Simpler, Quicker, More Profitable
If you are a homeowner who presently has an FHA mortgage, you could be eligible for an FHA Streamline refinance and benefit from current low home loan interest rates. The term “Streamline” means there is small paperwork to supply the FHA-approved lender. Thus, you can have a quicker and simpler refinance closing! The quicker you catch the low home loan interest rates, the better, right?
An FHA Streamline refinance typically has the following traits:
- No minimum credit score requirements, as with some other FHA programs
- No asset documentation such as bank statements, retirement accounts, etc.
- An Appraisal may not be necessary. If an appraisal is required for an FHA Streamline, the maximum loan is restricted to 97.75%. If an appraisal is not used, there is not a maximum loan restriction.
- Upfront mortgage insurance is decreased to 1.5% of the base loan amount (instead of 1.75% for a normal FHA refinance – not streamlined).
- Any cash from proceeds to the borrower is restricted to $500.
When it comes to FHA refinancing, you as a homeowner should know this:
- The mortgage to be paid off must be an FHA insured mortgage.
- The borrower cannot have had a 30 day or greater mortgage late payment in the previous 12 months.
- Non-occupant co-borrowers are not allowed.
- The new loan amount is subject to FHA maximum loan limits in your area (geographically)
- If a property has been converted to an investment property it can still qualify for a FHA streamline refinance if the existing mortgage is an FHA loan.
To make sure you get your FHA refinance done correctly, use only FHA HUD-Approved lenders. Those FHA HUD-Approved lenders generally have their own “in-house” FHA underwriters. This speeds up the time for approval and closing. Timing is crucial in today’s market as rate go up and down quickly.
If you’re interested in securing FHA Streamline refinances, to get started, you will need to gather the following information for a loan officer to review: First, you have to gather the Subject Property Address (that is, where do you live). Second, get an estimation of your property taxes and insurance. Third, find out how much is your original FHA loans balance from when you got the mortgage. Fourth, how much is your current FHA loan balance? Finally, estimate your home value. While appraisal may not be required, it is better to be prepared for it. Seeing that using the FHA Streamline could help you getting new loan in such an simple and quicker way, I should tell this is the time to do it. Pleased gathering!
Read also: FHA Financing and FHA 203K
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