Streamline Your FHA Mortgage
FHA has permitted streamline refinances on insured mortgages since the early 1980s. “Streamline refinance” refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction.
The basic requirements of a streamline refinance:
- The mortgage to be refinanced must already be FHA insured.
- The mortgage to be refinanced should be current (not delinquent). The borrower can have only 1 mortgage late in the last 12 months. Also, the borrower must have 3 months of no late history on any debt.
- The refinance results in a lowering of the borrower’s monthly principal and interest payments, or, under certain circumstances, the conversion of an adjustable rate mortgage (ARM) to a fixed-rate mortgage. The loan has to qualify for a net tangible benefit. Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more.
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
- The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.
- The borrower will continue to pay a monthly mortgage insurance premium and an up-front mortgage insurance premium. This is determined by the following: 1. Homeowners whose new loan replaces an FHA-backed mortgage prior to June 1 2009 may pay a lower monthly premium and lower up front premium. Contact us for actual amounts.
1. Homeowners whose new loan replaces an FHA-backed mortgage prior to June 1 2009 may pay a lower monthly premium and lower up front premium. Contact us for actual amounts.
2. Homeowners whose new loan replaces an FHA-backed mortgage after June 1 2009 may pay a higher monthly premium and higher up front premium. Contact us for actual amounts.
Mortgage Insurance may be canceled depending on when you obtained your FHA loan and what loan to value you had at time of closing.
Benefits and Qualifications of the Streamline Refinance:
- FHA Streamline Refinances are the fastest simplest way for FHA-insured homeowners to refinance their respective mortgages.
- The FHA Streamline Refinance program’s defining characteristic is that it does not require a home appraisal. Instead, FHA will allow you to use your original purchase price as your home’s current value, regardless of what your home is actually worth today.
- Employment and income are not verified. FHA does not require verification of a borrower’s employment or annual income as part of the streamline process. No paystubs, w’2s or tax returns are required for approval.
- Credit scores are not verified. The FHA does not verify credit scores as part of the FHA Streamline Refinance program. The payment history is used as a gauge for future loan performance.
- Loan balances may not increase to cover loan closing costs. The new loan balance is limited to this formula (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs may be paid for by the borrower in cash or at closing or by a credit from the lender in full. This would be considered a No Cost Loan.
FHA Streamline Highlights
- Avoid the extensive qualification process.
- Available with the stability of a 30-year or 15-year fixed mortgage.
- No appraisal necessary.
- Marginal credit requirements.
Calculate your monthly payment and see how the principal is paid over time.
Payment Amortization Calculator
Learn about alternative loan programs that may fit your goals.
- Looking for a more traditional option? Choose from the most competitive rates available.
- Maximize your monthly income by changing the term of your loan.
- Potentially save thousands in interest over the first 5 to 7 years by selecting an ARM over a traditional fixed mortgage
- Refinance into the security and low rates of a fixed-rate government loan.
- Qualify with less stringent qualification and credit requirements.
- Access to all fixed-rate terms.
- Lower your rate and payment if you are a spouse, military member, or qualified veteran.
- No monthly mortgage insurance (PMI).
- Fixed-rate and adjustable-rate program options, including jumbo loans.
Why you should choose Starwest Mortgage for your home purchase:
- As a broker, Starwest gives you access to the most competitive rates, fees, and programs the wholesale lending industry has to offer. Why use a broker?
- No Closing Cost program
- Get loan status updates anytime, anywhere. Take advantage of our online tools.
