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FHA Streamline Guidelines
Here is a blog written by John Strange about FHA Refinance Guidelines. It is an older article that has been updated and posted today. Great informative article.
https://gustancho.com/fha-streamline-guidelines/
gustancho.com
FHA Streamline Guidelines on Credit and Non-Credit Refinance
FHA Streamline Guidelines on cedit and non-credit refinance do not require income docs or verification and no new appraisal is required
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The FHA Streamline Refinance is a mortgage refinance product through the Federal Housing Administration (FHA) that can help homeowners with an existing FHA loan to lower their interest rate and reduce their monthly payment. Here are some key points about it:
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Speedy and Simplified Process: As the name suggests, an FHA Streamline is a relatively speedy and simplified process. Some borrowers are even able to skip the appraisal before closing.
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No Need To Verify Your Income Or Credit Score: There are two types of FHA Streamline Refinance loans. The type you qualify for determines whether your lender will require income verification and a credit check.
Please note that while the FHA doesn’t require a credit check with a non-credit qualifying streamline refinance, the lender you work with might still pull your credit report. Always consult with your lender or a financial advisor for personalized advice.
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What is an FHA STREAMLINE REFINANCE loan and how do you qualify? What are the eligibility requirements on an FHA streamline refinance loan? How difficult is it to get approved for an FHA streamline loan? What is the mortgage process of the FHA streamline refinance mortgage loan? What is the upfront cost of a streamline refinance. Can I take out co-borrowers with and FHA streamline refinance?
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An FHA Streamline Refinance is a simplified refinancing option for homeowners with existing FHA mortgages. Here’s a detailed breakdown on FHA Streamline Refinance Mortgage Loans:
Definition of FHA Streamline Refinance Mortgages:
It’s a faster, simpler way to refinance an existing FHA loan to a lower interest rate.
Eligibility requirements:
- Must have an existing FHA loan.
- The current FHA loan must be current (not delinquent).
- At least 210 days must have passed since the Closing of the original loan.
- Must have made at least six payments on the current FHA loan.
- There must be a “Net Tangible Benefit” (e.g., lower interest rate, lower term).
Ease of approval: Generally easier than traditional refinances because:
- No appraisal is required in most cases.
- Less stringent credit requirements.
- Employment and income verification may be waived.
- No cash-out option (which simplifies the process).
Mortgage process:
- Initial application and disclosure
- Loan processing (gathering necessary documents)
- Underwriting (less intensive than full refinances)
- Closing
Upfront costs:
- Upfront Mortgage Insurance Premium (UFMIP): 1.75% of the loan amount.
- It can often be rolled into the loan.
- Other closing costs vary but are typically lower than traditional refinances.
Co-borrowers:
- Existing co-borrowers can be removed without credit-qualifying.
- Adding a co-borrower typically requires the refinance to be processed as a regular FHA refinance, not a streamlined.
Additional points:
- The loan amount can include the principal balance plus the new UFMIP.
- It cannot include delinquent interest, late charges, or escrow shortages.
- The interest rate must be lower than the current rate (unless refinancing from an ARM to a fixed-rate mortgage).
Types of FHA Streamline Refinances:
- Credit Qualifying: Requires credit check and debt-to-income calculations.
- Non-Credit Qualifying: This doesn’t require these checks but may have stricter requirements.
Remember, while FHA Streamline Refinances are generally easier to obtain, lenders may have overlays or additional requirements beyond FHA’s minimum standards. It’s always best to shop around and compare offers from multiple lenders.