Calling all FHA mortgage holders who want to take advantage of the historical low interest rate environment that the government has facilitated for us. FHA has an amazing opportunity for current FHA customers to dramatically reduce their monthly payment and skip a month on your payment, it's called the FHA Streamline Refinance. This program will provide you the vehicle to obtain the historical low rates that are available right now. According to the many rate sheets I see on a daily basis, FHA fixed rates have been under 4% for a 30yr fixed rate. If you have fixed rate over 5% this is for you.
The FHA Streamline loan has been around since the early 1980s but has only recently gained popularity with the combination of decreased home values and low interest rate enviornment.
How Do I Qualify?
- Must currently have a FHA loan
- According to FHA you don't have to have a minimum credit score to qualify but the majority of lenders have their own "underwriting overlays". Most banks require a 640 middle score and a couple will go down to a 620.
- Must show proof of employment although not proof of income
- Must not have any mortgage lates in the past 12 months if you want to refinance without an appraisal, 1 mortgage late with an appraisal
Can I Really Streamline my FHA Loan Without an Appraisal?
YES YOU CAN Every FHA loan in the US has a unique FHA case # that is assigned to it. Think of like it's own medical record number. When we look at doing the FHA Streamline, I can access that FHA case# much like a doctor uses your medical record number to pull up your history. The FHA case # will contain the underwriting information from your last FHA transaction whether that was a purchase or a refinance. Most important of that information is the appraisal value from that previous transaction. FHA will permit us to use that value for your new FHA Streamline.
What is the Cost of The FHA Streamline?
FHA Streamlines without appraisals do not permit lender fees, points, attorney fees, or escrows to be added to your current loan balance. There are only two amounts that get added. The first is your new upfront FHA insurance. Currently that is 1% of your loan amount. If you have had your current FHA loan less that 3yrs you will get a portion of that new amount reduced.
The other amount that can be added is up to 2 months of mortgage interest. Most lenders do this to allow you to have a month off on your mortgage. The loan still has all the basic fees laid out above but we use a portion of the bank profits to cover the costs of the loan.
What I try to do for my clients is have them hold on to their current mortgage payment and bring that to closing. That amount covers the remainder of the cost of the loan and that months' mortgage obligation.
EXAMPLE: If we were closing in Jan. you would not make your Jan. payment to your current lender. You would instead bring that amount to closing. Your new payment would then start in March. IMPORTANT- If you have a escrow shortage or taxes or insurance that are about to come due, then sometimes it can be more than a mortgage payment, but I like to keep it as close to a payment as possible.
How Often Can I Streamline my FHA Mortgage?
You can streamline every 6 months, although with rates being so low right now this might end up being the best opportunity in history.
How Long is the Process?
I have developed a system that will allow you to work closely with me and my processor to close your FHA Streamline in as little as 3 weeks.
For more information click here.
