If you are a Seattlehomeowner who currently has a FHA mortgage and you are able qualify for the streamline refinance scenario, then below are some general expectations when thinking this through.
Ideally, you would prefer to receive a credit large enough from your lender to cover all closing costs. So, for example, let’s hypothetically say that you will incur $5k in closing costs (and prepaids for taxes and insurance, aka ‘escrow reserves). Then let’s say that at a rate of 4% you are able to cover all of the $5k in closing costs incurred. The thing about FHA Streamline refinances is that you will always have to bring in a little money to closing (even if all of your closing costs are covered through credits).
In this case, all of your actual closing costs are covered through a credit, but you will still be required to bring cash to close to cover:
- a prorated monthly MI payment,
- and OTHER minimal transaction fees (usually under $100) from the existing lender
These fees are required to be paid for by the borrower at closing. So, in general, the ideal cash to close scenario for a streamline transaction would be that you would only be required to bring in the cost of the prorated monthly MI payment and the OTHER fees associated with the payoff of your current loan.