What is streamline fha

You can find your lenders contact information by clicking on our List of approved lenders. Skip to main content. Office of Hospital Facilities Why Choose ? Overview of Lean Why Choose ? The basic requirements of a streamline refinance are: The mortgage to be refinanced must already be FHA insured. With the FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size for your new mortgage.

Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration. Some lenders might enforce credit score minimums or other underwriting standards for FHA Streamline mortgages.

Therefore, its number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back at least three months. Homeowners with day, day, and day late payments are not allowed to use this refinancing option.

One late mortgage payment is allowed in the last 12 months. Loans must be current at the time of closing. The FHA requires that borrowers make six mortgage payments on their current FHA-insured loan, and that days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

For instance, say a homeowner has an FHA loan opened in May with a rate of 4. The homeowner looks into a Streamline Refinance, and receives a rate quote at 3. The new combined rate would be 4. This FHA refinance would be eligible. Another allowable Net Tangible Benefit is to refinance from an adjustable-rate mortgage to a fixed-rate mortgage.

This is considered a benefit because fixed-rate mortgages have predictable rates and payments that carry less risk of default. For non-credit qualifying Streamline loans, there is no verification of employment, nor are there paystubs, W-2s or tax returns required for approval.

Instead, it uses payment history as a gauge for future loan performance. This means that FICO scores below , below , below , and even below could be eligible for Streamline Refis. Some lenders, however, create their own minimum requirements. The maximum mortgage amount on your new loan is equal to your current principal balance plus your upfront mortgage insurance premium.

All other costs — including origination charges, title charges, and prepaid taxes and insurance — must be either paid by the borrower as cash at closing, or credited by the loan officer in full. But you pay a higher interest rate in exchange. If that amount is larger than your current loan balance, you take the difference in cash.

Homeowners can use these funds for any purpose: to pay off debt, improve your home, or create an emergency fund. As shown in the chart above, those using an FHA Streamline within three years of their original loan stand to get an upfront MIP refund. This can significantly lower the amount of UFMIP added to your new loan and reduce the amount you have to pay overall. Only homeowners with a starting loan-to-value ratio of 90 percent or less can cancel mortgage insurance after 11 years.

Refinancing homeowners could also bring cash to closing to reduce their loan balance and change their MIP disposition. However, not everyone will have the cash to make such a move. This is why, when exploring an FHA Streamline Refinance, you should also look at other mortgage refinance options including conventional mortgage loans via Fannie Mae or Freddie Mac.

If you can qualify for a low rate, conventional loans have a big plus: You can cancel private mortgage insurance PMI once your loan-to-value ratio falls below 80 percent. With a cash-out loan, you could access part of this equity while also refinancing your entire mortgage.

Not only does this save you the cost and hassle of getting an appraisal and worrying about whether it will be high enough, it also allows eligibility even if your loan is currently under water i. You have the option, however, to use a current appraised value. No verification of income or employment is required. Being currently unemployed or underemployed will not prevent you from refinancing with an FHA Streamline.

Credit score verification is also waived, although many lenders add on a minimum credit score requirement of approximately The process is easier and faster. The FHA Streamline refinance loan requires significantly less documentation.

Coupled with the elimination of the appraisal, the turnaround time can sometimes be as quick as two to three weeks. If you have been postponing refinancing expecting there might be significant hassle involved, the FHA Streamline is an appealing solution.

Rates are the same as on regular FHA mortges. There is no prepayment penalty. In addition to already holding an FHA-insured mortgage, other requirements include:.

You also cannot receive cash-out with the FHA Streamline. Your mortgage lender can guide you through the process. As with any mortgage, talk with your current lender, shop around to compare options and work only with trustworthy, reputable lenders who are rated highly by the Better Business Bureau.

VA loans have a refinancing program, and there are also conventional refinance options.