FHA Streamline Refinance

If you are looking to refinance an existing FHA mortgage with an FHA Streamline Loan, there are some details you should know when planning for the loan application. FHA Streamline Refinancing loans have a set of requirements connected to the loan’s benefit to the borrower; these rules will directly affect the borrower’s eligibility to be approved for an FHA Streamline mortgage.

To get FHA approval for a Streamline Refinancing loan, there must be a “net tangible benefit” to the borrower as a result of the new loan

“The lender must determine that there is a net tangible benefit to the borrower as a result of the streamline refinance transaction, with or without an appraisal. Net tangible benefit is defined as:

A 5% reduction to the principal and interest (P&I) of the mortgage payment plus the annual mortgage insurance premium (MIP) or Refinancing from an Adjustable Rate Mortgage (ARM) to a fixed rate mortgage."

FHA REFINANCE: STREAMLINED REFINANCING

This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. The FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed by your lender saving you valuable time and money.

NO APPRAISAL OPTION: The FHA Streamline Refinance comes with a no appraisal required option. This works out well for current FHA loan clients who have lost value and may even be underwater on their mortgage.

NO OUT OF POCKET CLOSING COSTS: The FHA Streamline Refinance loan is structured in a way that most people have NO out-of-pocket closing costs, and we start the loan based on your current loan balance.

In order to qualify for a Streamlined Refinance your original home loan must be an FHA loan in good standing and the refinance must lower your monthly interest payments. This type of refinancing option reduces your monthly expenses by lowering your payments, but there is no option to receive cash back. This works well for people who are in good financial standing with no significant debt because it allows you a little extra money each month that can be put to good use elsewhere.

If you have a conventional loan you wish to refinance with an FHA refinance loan, you'll need to apply with the usual employment verification, credit check, debt ratio requirements and other considerations. An FHA refinance loan can get you many of the same results, and you may get better rates and lower payments.