FHA Streamline Refinance Program
If you bought your home with an FHA loan, or your most recent refinance was through the FHA, a streamline refinance is almost certainly the quickest and easiest way for you to lower your rate and payment. Borrowers are often amazed by how little time and effort is required to process the FHA streamline loan.
Advantages of the FHA Streamline Refinance:
Below are some of the most notable advantages of the FHA streamline refinance program:
- No new appraisal is required.
- No credit check is required.
- The cost to refinance through an FHA streamline is much cheaper in comparison to nearly all other types of refinancing options.
- No LTV restrictions. You can technically be “underwater” in your mortgage and still qualify for a refinance due to the fact that FHA will use your previous appraisal when your home might have been worth signficantly more than it is at the time of refinancing. This is a common scenario considering that many FHA borrowers only put 3.5% down at the time of purchasing their home.
Would you like to see if you qualify for the FHA streamline? We can help match you with an FHA lender that offers free consultations. To have an FHA lender contact you, request to get matched with a lender
FHA Streamline Refinance Requirements
Below are some of the requirements of the FHA streamline program:
- Your current loan must be insured by FHA. If your current loan is not an FHA loan, you can still refinance into an FHA loan, but you would not qualify for a streamline refinance.
- Your loan must be current.
- You have to be in the property for at least 6 months before you can qualify for refinancing.
- You will have to refinance through an FHA approved lender. We are an FHA approved lender.
- There has to be a clear benefit to you as the borrower. This should be a clearly lower interest rate and/or mortgage payment. It could also be going from an adjustable rate mortgage (ARM) to a fixed rate mortgage.
- There can be no cash taken out from your home equity. It must be a “rate and term” refinance only. To take out cash, you will need to look at the FHA cash out refinance program. If you exclusively want to make home improvements, instead of a cash out refinance, you should consider applying for the FHA 203k streamline loan program. The FHA 203k loan was set up to provide FHA borrowers who have enough equity with cash to invest into repairs. There are also FHA 203k loan programs for home purchase loans on “fixer uppers”. Please reference our page on FHA 203k loans for more information.
Frequently Asked Questions
Below are some of the most common questions we receive regarding the FHA streamline refinance program:
Is there really no credit check required?
The no credit check policy means that your actual credit report (credit history) is not pulled. Only your mortgage payment history is looked at. You must be current on your mortgage payments, but other debts and credit factors are not reviewed.
How long does a FHA streamline refinance take?
The length of time to process and close this type of loan is significantly less than a typical mortgage loan. The fact that no appraisal must be ordered and then reviewed, no income documentation or credit check is required, allows for much greater efficiency. Most streamline loans can be closed in two weeks or less.
Can I include the closing costs into the new loan amount?
Yes, you have the option to include the closings costs in your loan. This means that there are no direct out of pocket expenses, but keep in mind that you will also be paying interest on the fees being included into the new loan amount.
Do I have to pay mortgage insurance on the FHA streamline program?
Yes, all FHA loans require both upfront mortgage insurance premiums (UPMIP) and monthly mortgage insurance premiums (MIP) to be paid. If you believe your loan amount is less than 80% of the value of your home, which is called your loan-to-value ratio (LTV), you may want to consider switching to a conventional mortgage. This will allow you to eliminate your FHA MIP. If you are over a 80% LTV, a FHA to FHA refinance (the streamline refinance) is almost certainly your best bet.
The best way to get your questions answered is to speak with an FHA loan representative. We can help match you with a mortgage lender that offers FHA loans in your location. To have a mortgage lender contact you, request to get matched with a lender.