FHA Streamline Refinance Changes
We have seen tightening of all loan guidelines.... And the same is true for the FHA Streamline Refinance Loan.
Key Revisions:
* Seasoning: At time of application the borrower must have made at least 6 payments.
* Payment History: For mortgages with less then 12 months payment history, all payments must be paid on time. For mortgages with more than 12 months history, no more than one 30-day late is allowed.... and the previous three months must have been made on time as well.
* Net Tangible Benefit: The lender must determine that there is a benefit to the borrower making the loan. A reduction in PITI(payment) or refincing from an ARM to a fixed rate or reducing the term of the loan. See your preferred lender for the fine print.
* Certifications & Verifications: Employment must now be verified. And any cash to close funds must be verified.
* Credit Score: Most lenders require 620 FICO score.
* Maximum Combined Loan-to-Value: If subordinate financing(2nd lien) is to remain in place then the maximum CLTV = 125%
With or without an appraisal, this is still a very good loan for those who purchased back when rates were a little over 6% and would like to lock in at these historically low rates today!!
The biggest benefits to the loan is that lenders do not care about new debt taken out since the mortgage was originally taken. And borrowers who have seen a decline in income are not affected.
Talk to your preferred lender today and see if an FHA Streamline Refinance is right for you!!
Tom Burris
DallasLoanGuy.com
Dallas, TX
I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!!
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