FHA Streamline Refinance BasicsFHA Streamline Refinances are a very convenient way for those with an FHA mortgage to refinance a home. In fact, it is a very rapid and straightforward method of refinancing real estate – but only if you have an FHA mortgage. The service is not available to those with regular Fannie Mae or Freddie Mac mortgages.

What is Special About FHA Streamline Refinance?

First, this type of refinance requires no prior appraisal. Rather than having your home appraised, you can use the original purchase price you paid as its current value. This can be of significant benefit to you if your home has depreciated since its purchase. This type of streamline refinance is available even if your home is currently worth considerably less than the amount you still owe on it.

Apart from this disregard of the loan-to-value ratio, the FHA updated such refinance offers in 2011 so that no verification is necessary for employment status, income levels or credit score. Fundamentally, all the data provided with the original mortgage application for the property is taken as still valid.

Otherwise, the FHA Streamline Refinance program is very much the same as most other forms of refinance available to homeowners. Interest rates can be variable or fixed, and loan periods can be over 15 or 30 years. So what’s the catch? The above factors are what you do not have to provide. Here are some factors involved in qualification for such refinancing.

Qualifications to Refinance a Home This Way

  • You must have a perfect record of mortgage payments for the last 3 months.  No late payments are permitted. BY means of this stipulation alone, the FHA is disqualifying a large proportion of those who would be likely to miss payments on the Streamline Refinance agreement.
  • In addition to the above stipulation, only one late payment of your mortgage is permitted over the past year.  That disqualifies many others.
  • Before being eligible for FHA Streamline Refinance, applicants must make 6 payments of an existing FHA mortgage loan.
  • A period of 210 days must have passed since the closing date of the current mortgage before an application for Streamline Finance can be made.
  • In addition to all of the above conditions, there must be what is referred to as a ‘Net Tangible Benefit’ when applicants refinance a home. What this means is that the mortgage payment (principal+interest+insurance) must be reduced by at least 5%, or switched to a fixed rate mortgage from an adjustable rate mortgage. It is not permitted to use the refinance loan as source of ready cash.

If you qualify, then the FHA Streamline Refinance is a great way to refinance a home. To see if you qualify for this program, please contact us using the phone number at the top of the page or request a rate quote using the Fast Quote form above.