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DOCUMENTS FOR FHA AND VA STREAMLINE REFINANCE
What type of documents is requrired for an FHA and VA streamline refinance? Why am I being asked to provide these documents if they are not required for a Streamline Refinance?
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What Documents Are Needed for FHA and VA Streamline Refinancing?
Streamline refinance is less complicated and has less documentation than traditional refinancing procedures. However, documents may still be important wherever the case is required. Below has been provided an outline of the documents that revolve around both FHA and VA streamline refinances:
FHA Streamline Refinance
Filing of Loan Application (Form 1003): Standard application used when dealing with a mortgage form.
Latest Mortgage State: This is the loan that is currently being refinanced.
Income Proof: Although extensive documentation is not required, proof of employment may have to be provided via a pay stub or a tax return.
Credit report: Lenders search for these three numbers when retrieving their credits. However, one might be required to submit their history.
Home insurance dec page: This document confirms that the property in question is already insured and that there is no need to refile.
FHA Case Number: To check if this number has already been assigned to them, a new case number from FHA needs to be assigned.
VA Streamline Refinance (IRL)
Filing of Loan Application (Form 1003): It’s the same application mentioned above.
Latest Mortgage State: This document is key to submission. It states that the current VA loan is being taken out.
Providing Proof of Income: Retired documents may be one of many proofs. As highlighted in this statement, some lenders still want a pay stub or tax return to ensure reliable income before the VA refinance application goes through.
Certificate of Eligibility (COE): Some lenders may ask for it even if they aim to process applications quickly, as it strengthens your claim to the VA benefits.
Credit Report: Lenders can easily obtain this, but you may need to furnish other basic documents if the information does not match.
Reason for Further Documents to be Submitted
Although streamlined refinances are constructed around the idea of less documentation, there will always be some or all lenders who request more documents. The reasons include:
Lender Policies: Some lenders may have their specific requirements above the minimum set by FHA or VA. This also entails providing more documents for risk assessment.
Compliance and Underwriting Standards: It may be the case that the lender disregards the borrower because they cannot fulfill their expectations. In such cases, the lender will always ask for more documents to ensure the borrower can cope financially.
Creditworthiness: If a lender doubts your credit history or financial situation, it may ask you to show documents that will help assess risk.
Changes in Financial Situation: If you are applying for a mortgage and there have been tremendous changes from the last mortgage you took, for example, loss of job, loss of income, etc, lenders would want to check the current state.
Verification of Eligibility: To verify that you still qualify for an FHA or VA loan, lenders may require some documents to support the streamlining process.
In addition to the above, FHA and VA streamline refinances only require a little documentation. Still, lenders can request other documents depending on their policies, compliance items, and risk calculations. If you have specific document requests for not closing that sale, speak with your lender to clarify their requirements. In any case, I would not mind further explanation or revision; feel free to make such a request!