The FHA Streamline Refinance program gets its name because it allows borrowers to refinance an existing FHA loan to a lower rate more quickly. ... You can reduce the interest rate on your current mortgage without a full credit check, yet you need to have paid your mortgage on time over the last 12 months.
Requirements for FHA Streamline Refinancing
Do I have to pay closing costs on an FHA Streamline Refinance? The borrower has to pay closing costs on an FHA Streamline Refinance. Unlike other types of refinances, you cannot roll these costs into your loan amount.
While it might sound too good to be true, the FHA Streamline is a perfectly legit refinance program backed by the Federal Housing Administration. It can offer a simplified, low-doc application process and below-market rates. But you have to be a qualified homeowner with a current FHA loan to use this program.
The FHA Streamline has five main advantages.
If you bought a house with an FHA loan some years back, you may be eligible to cancel your FHA PMI today. ... If your loan balance is 78% of your original purchase price, and you've been paying FHA PMI for 5 years, your lender or service must cancel your mortgage insurance today — by law.
How Long Does Streamline Refinance Take? In an ideal situation, a borrower can expect a streamline refinance to be completed anywhere from 30 days to as little as a few weeks. The typical refinance loan process can take 45 to 60 days.
"Except for credit qualifying streamline refinances, FHA does not require a credit report. The lender, however, may require this as part of its credit policy. If a credit score is available, the lender must enter it into FHA Connection (FHAC).
If you currently pay PMI or MIP mortgage insurance, you can get rid of it by refinancing once your home reaches 20% equity. If you're shopping for a new home loan, look for options that allow no PMI even without 20% down.
For an FHA streamline refinance, typical closing costs range between $1,500 and $4,000. Though, closing costs can vary widely depending on the lender, borrower characteristics, and the loan amount.
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