subject: The Growth Spurt Of Fha Streamline Refinance [print this page] The Growth Spurt of FHA Streamline Refinance
By Mayer Dallal
In an age when people are looking for convenient, the FHA streamline refinance comes to mind. The streamline refinance with FHA is the easiest and quickest way to do a loan, all with the ease and convenience of no appraisal being done. Thats right; NO appraisal is necessary when doing a streamline with FHA.
What is an FHA Streamline Loan?
To give you a little bit of background on the FHA streamline loan, it first showed up on the scene in the early 1980s. Since that time, thousands of families have used this as an avenue to a much easier transaction, with less costs and a much lower interest rate. The term streamline, simply refers to the level of documentation and underwriting needed for the loan. There are many no cost loans running around out there, but this just means that there is less out-of-pocket expense for the homeowner, with a higher interest rate. Other lenders offer the same loan, with costs included in the new loan amount. No matter how much ease is involved, there still must be the right amount of equity in the property in order for you to take advantage of this loan, and the appraisal cant put you upside down if there is one being done. Dont get too far into the logistics of the program, before you have first weighed the options on what is best for you and your family with your current financial position. Remember, that a higher interest rate will truly impact your finances, so be future minded when making your decision on this loan.
You can do your streamline refinance with or without an appraisal, but either way it is not required that credit is underwritten. HUD may not disqualify you if you have had late mortgage payments, but the lenders have their own rules and will approach your loan accordingly. In general when it comes to a streamline refinance, you will need to be current on the mortgage. You need at least six months minimum of on-time payments, a minimum fico score of 640, one pay stub to show the ability to repay, one bank statement, and bring one mortgage payment to the closing table, and generally the loan can close in as little as two weeks. Remember, FHA is not the lender, but they do provide guidelines for their programs. Additionally, a new individual can be added to the title, and this is a common occurrence for someone who may have owned the home prior but has married since and needs to add their new spouse. Deleting someone from the title may require additional qualifications as well.
The Basics of the FHA Streamline Refinance
Those who may have a non-FHA loan that is delinquent, and would like to refinance into an FHA secured mortgage, must fully qualify for the rate and term refinance. Once you go from and FHA loan to another FHA loan, you are then eligible to take advantage of the FHA streamline refinance program.
So, just to recap:
The current mortgage must be FHA insured, and the mortgage must be current.
The borrower must have a minimum fico score of 640.
The refinance must lower your principal and interest payment.
The borrower cannot receive cash out of more than $500.
The borrower must bring one pay stub to show the ability to repay, but nothing is done with the paystub.
Any second liens can remain in place, as long as they are still subordinate to the first.
The term of the new loan must be the lesser of 30 years, or the unexpired term of the mortgage plus 12 years. You cannot go from a15 year loan to a 30 year loan.
An appraisal is not required unless the closing costs are included into the loan, and the appraisal cannot put the borrower upside down. Those streamline refinances without an appraisal, are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium, plus the new upfront MIP if it is to be financed into the mortgage/
No termite report is required.
The borrower must have a minimum of 6 months of pay history.
The borrower will need to provide one bank statement, and one mortgage payment to the closing table.
Lastly, the borrower cannot be late or delinquent on any federal debt.
These are just the basic details, but with FHA the possibilities are endless, not to mention the rates are the lowest they have been in 50 years. The average FHA interest rate is 5.75, and can go as low as 4.5 if you qualify and the rates are available. The rates fluctuate daily with the market, but you can still look at the options with a 15 or a 30 year fixed rate. With as low as the rates are now, you will never need to refinance again. For more information on FHA, and how you can begin the process today, you can visit my website at www.fhaloansnow.net, or you can call me directly at (310) 498-2700.
by: Mayer Dallal
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