Q: My neighbor just got a great deal through her mortgage company on an FHA streamline loan.I want to apply for the streamline refinance program and am wondering if my existing mortgage must be an FHA loan in order to qualify.
A: The Federal Housing Administration (FHA) established the streamline refinance program to help borrowers of FHA insured mortgage loans refinance with less documentation and no appraisal required for owner-occupied homes. The basic eligibility requirements for the streamline refinance program are:
- The mortgagebeing refinanced must be insured by FHA.
- Payments on the existing mortgage must be current.
- The new loan’s principal and interest payment must be lower. In certain situations, an ARM loan can be converted to a fixed-rate mortgage (FRM) with a higher payment.
- FHA loan guidelines do not permit cash to be taken out from a streamline refinance.
Lenders can offer the option of no-cost streamline refinancing. Instead, borrowers can choose a loan with a higher mortgage rate and the lender pays the costs in exchange. It’s important to understand that borrowers do pay for their closing costs, but they do it over time instead of paying a lump sum at closing. FHA does not allow closing costs to be added to the mortgage amount for streamline refinance transactions.
If your home is worth less than your FHA loan balance, a streamline refinance may provide an alternative to standard refinance loans, which require appraisals and do not refinance “underwater” homes.
Contact your mortgage lender or any FHA-approved mortgage lender for more information.
- Your Mortgage GPS: Step-by-Step Directions for Getting a Mortgage 12,775 views
- Should You Give Out Your Social Security Number to Get a Mortgage Quote? 9,414 views
- 15 Things to Know About Your New EMV Credit Card Chip 7,646 views
- The Ultimate Credit Score Survival Guide: 45 Rules to Help Increase Your Credit Score 7,260 views
- 5 Things You Should Never Put on a Credit Card 4,669 views
- Mortgage Rates Might Fall Today – Maybe Significantly 4,240 views
- How Do You Compare Personal Loans and Get the Best Deal? 4,068 views