Learning About FHA Streamline Refinance

If you presently have a FHA mortgage, you could be eligible for a streamline refinance and benefit from current low home loan interest rates. The term “Streamline” simply means there is little paperwork to supply the lender. As a result, it permits the homeowner a faster and easier refinance closing.

An FHA streamline refinance typically has the following characteristics:.

• No minimum credit score requirements.
• No asset documentation such as bank statements, retirement accounts, etc.
• An Appraisal may not be necessary.   If an appraisal is required for an FHA Streamline, the maximum loan is restricted to 97.75%.  If an appraisal is not used, there is not a maximum loan restriction.
• Upfront mortgage insurance is decreased to 1.5% of the base loan amount (instead of 1.75% for a normal FHA refinance which is not streamlined). 
• Any cash from proceeds to the borrower is restricted to $500. 
Here are some simple rules for homeowners to know when it comes to FHA refinancing:
• The mortgage to be paid off must be an FHA insured mortgage.
• The borrower can not have had a 30 day or greater mortgage late payment in the previous 12 months.
• Non-occupant co-borrowers are not allowed.
• The new loan amount is subject to FHA maximum loan limits in your geographical area.
• If a property has been converted to an investment property it can still qualify for a FHA streamline refinance if the existing mortgage is an FHA loan.

Now, to make sure you get your FHA refinance done correctly, use a mortgage company or loan officer whose company is HUD approved.  The benefit is you get to use a company that is an endorsed HUD approved lender and that generally mean they have their own "in-house" FHA underwriters.  This speeds up the time for approval and closing. Timing is crucial in today’s market as rate move up and down quickly.