FHA Guidelines on Streamline Refinance Mortgage Guidelines
In this blog, we will cover FHA guidelines on streamline refinance mortgage loans. FHA streamline refinance is a fast-track loan program. Most streamline refinance loans can get closed in less than three weeks. Tens of thousands of homeowners still have an FHA loan with mortgage rates higher than 7.5%. Mortgage rates are dropping. FHA annual mortgage insurance premium has dropped to 0.55% from 0.85%, according to Zack “Hunter” Hoyer, a dually licensed realtor and loan officer. Here is what Zack advised:
There are tens of thousands of borrowers who still have their FHA annual mortgage insurance premium at 0.85%. They can qualify for an FHA streamline refinance mortgage with limited documents and close in three weeks or less. Homeowners with an FHA loan can refinance their loan with another FHA loan at a lower interest rate and no closing costs.
The best part about streamlining per FHA guidelines on streamline refinance mortgage loans is that no income, credit, or appraisal is required. Due to the limited documentation required, streamline refinance mortgages only takes three weeks or less. There are FHA streamline mortgages where it can close in less than ten days. This article will discuss and cover FHA guidelines on streamline refinance mortgage guidelines.
FHA Guidelines on Streamline Refinance Loans
The only requirement that HUD requires under FHA guidelines on streamline refinance is that the borrower is timely on their FHA loan. HUD already insures the property, so there is no need for a new home appraisal. According to Wendy Lahn, the Chief Legal Officer at Non-QM Mortgage Brokers, here is how HUD thinks about existing borrowers with FHA loans:
The borrower has been making timely payments on their current FHA loan, so why would the borrower not make timely payments on a new FHA loan with lower monthly payments? No income verification is required. This is because the borrower has proved they have made past timely payments.
The borrower can have bad credit and late payments on all other credit tradelines except their FHA mortgage loan payments. Limited documents are required. Streamlines are designed to lower monthly payments and make the streamlined process easy. To do a streamlined refinance mortgage, the new FHA loan must offer borrowers a net tangible benefit.
Requirements on FHA Guidelines on Streamline Refinance Loans
This section will review the requirements for FHA streamline refinance loans. The borrower must be current with their FHA loan for the past 12 months. One 30-day late payment is allowed. The new FHA loan needs to benefit the borrower with savings.
Under FHA guidelines on streamline refinance, there is no cash-out allowed—only rate and term. No income nor asset verification on streamlined refinances. No credit score requirements. No credit requirement. The only credit required is timely payments on your FHA loan in the past 12 months.
The lender prefers no late payments in the past 12 months. However, the borrower can have recent late payments. Other derogatory credit, except that their mortgage payment needs to have been timely. Three weeks to close. Limited documents. The lender can cover closing costs. No money is out of pocket by the borrower. Get to skip one to two months of mortgage payments. FHA appraisal is not required on FHA streamline refinances.
FHA Streamline Refinance Can Save Tens of Thousands of Dollars For Homeowners
Mortgage interest rates have increased since the election of Donald Trump. However, if interest rates drop where homeowners can greatly benefit from an FHA streamline refinance, it is a very easy process.
To qualify for a streamline refinance mortgage, the borrower needs to have an existing FHA loan. You cannot have been late on your current FHA loan. FHA guidelines on streamline refinance requires timely payments on your FHA loan for the past 12 months.
All borrowers on the original FHA loan must be on the new streamlined loan. FHA streamline refinances have been around since the early 1980s. It is one of the most popular refinance programs today. Some lenders specialize in nothing, but FHA streamline mortgages.
HUD Guidelines on Net Tangible Benefits on FHA Streamline Refinance
This section will discuss who benefits from FHA streamlined mortgages—homeowners with FHA loans with 7.5% or higher mortgage rates. Homeowners still have the higher FHA MIP at 0.85%. Current FHA MIP is at 0.55%. Homeowners who have ARMs can refinance it to a 30-year fixed-rate mortgage.
Homeowners with FHA loans can do a fast-track refinance loan with a new FHA streamline refinance mortgage loan with limited documentation and no income verification. No home appraisal is required. The closing can take place in your home.
Homeowners who recently purchased a home need a six-month seasoning to be eligible; six full months have elapsed since the first payment due date or 210 days from the original FHA mortgage closing date.
FHA Guidelines on Streamline Refinance Mortgage Process
Homeowners with current FHA loans can contact Non-QM Mortgage Brokers to see if they can benefit from FHA streamline Refinance without closing costs. John Strange of Non-QM Mortgage Brokers explains why choosing Non-QM Mortgage Brokers is in a borrower’s best interest:
The team at Non-QM Mortgage Brokers has a national reputation for being able to do mortgage loans other lenders cannot do. Over 80% of our clients are borrowers who could not qualify at other mortgage companies.
Homeowners with an FHA loan with high rates and a 0.85% FHA annual MIP, please contact us at Non-QM Mortgage Brokers, Inc. at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Non-QM Mortgage Brokers is available seven days a week, evenings, weekends, and holidays seven days a week.
