FHA Streamline Refinance: Get It Done Right
FHA has granted streamline refis on insured mortgages since the early 1980’s. The “streamline” pertains only to the amount of documentation and underwriting that needs to be executed by the loaner, and does not mean that there are no tolls involved in the dealing. The standard prerequisites of a streamline refinance are:
The house loan to be refinanced must already be FHA insured.
The home mortgage to be refinanced should be current (not delinquent).
The home refinance is to result in a lowering of the borrower’s monthly principal and interest payments.
No cash may be made out on home mortgage refinanced using the streamline refi action.
Lenders may offer streamline refinances in several ways. Some loaners provide “no cost” home refinance (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the home refinance.
Lenders may extend streamline home refinances and take on the closing costs into the new mortgage amount. This can simply be complete if there is enough equity in the prop, as determined by an appraisal. Streamline refi can also be done without estimates, but the new loan amount cannot pass the primary loan sum. Investment holdings (properties in which the borrower does not lodge in in as his or her key residence) may only be refinances without an appraisal.
When you want to get an FHA loan on, yet make sure that you’re working with someone who knows the FHA streamline market and is easy to work with.