FHA Streamline Refinance
MaraiD Lending offers “streamline” refinancing options to consumers to get better mortgage terms without an extensive qualification process. Streamline refinance programs typically allow borrowers to bypass many of the traditional mortgage requirements by offering minimal credit scoring requirements, no new appraisal, easier income and asset verification, and limited paperwork.
Reducing the paperwork can often make the process easier and faster, which is why it’s called “streamline refinancing.” Streamline refinance refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction.
What is the FHA Streamline Refinance?
The FHA Streamline is a special refinance product, reserved for homeowners with existing FHA mortgages. An FHA Streamline is the fastest, simplest way for FHA-insured homeowners to refinance their mortgages into today’s low mortgage rates.
Benefits of the FHA Streamline program include:
- Low Refinance Rates: FHA loan rates averaged 3.94% in October, 2019 (the most recent data available). This is an incredibly low rate compared to recent history
- Lower MIP Rates: If you got an FHA loan between 2010 and 2015, you may be able to lower your annual mortgage insurance premium using the FHA streamline
- MIP Refund: Homeowners who use the FHA Streamline Refinance may be refunded up to 68% of their prepaid mortgage insurance, in the form of an MIP discount on the new loan
- No Appraisal: You can use the FHA Streamline Refinance even if your current mortgage is underwater
- No verification of job or income : You may be eligible for the FHA Streamline even if you recently lost your job or took a pay cut
- No credit check : A low credit score won’t stop you from using the FHA streamline program. This is almost impossible to find with other refinance loans
If you currently have an FHA home loan and you want to refinance into a lower rate, the FHA Streamline should be your first stop. Its benefits are near-unmatched by any other refinance program.
How the FHA streamline works
For the most part, the FHA Streamline works like any other refinance program. It’s available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there’s no FHA prepayment penalty to worry about.
The FHA Streamline cannot be used to refinance a 30-year mortgage into a 15-year mortgage. It can, however, be used to extend a 15-year loan into a 30-year. Doing so lowers monthly payments even further for homeowners.
Another big plus is that rates for the FHA Streamline Refinance are the same as mortgage rates for a “regular” FHA loan. There’s no penalty for being underwater, or for having very little equity.
FHA Streamline Refinance FAQ
What is the FHA Streamline program?
FHA Streamline is a refinance program that only current FHA homeowners can use. It’s faster and easier than most refinance programs, with no documentation required for income, credit, or home appraisal. An FHA Streamline Refinance can help homeowners lower their annual mortgage insurance premium (MIP) or even get a partial refund of their upfront MIP payment.
How does the FHA Streamline Refinance work?
The FHA Streamline Refinance resets your mortgage with a lower interest rate and monthly payment. If you have a 30-year FHA mortgage, you can use the FHA Streamline to refinance into a cheaper 30-year loan. 15-year FHA borrowers can refinance into a 15- or 30-year loan. The FHA Streamline does not cancel mortgage insurance premium (MIP) for those who pay it. But annual MIP rates may go down, depending on when the loan was originated.
Do I have to pay closing costs on an FHA Streamline Refinance?
The borrower has to pay closing costs on an FHA Streamline Refinance. Unlike other types of refinances, you cannot roll them into your loan amount. FHA Streamline closing costs are typically the same as other mortgages: 2-5% of the loan amount, or $3,000 to $7,500 on a $150,000 loan. The only difference is, you don’t have to pay for an appraisal on an FHA Streamline. That could save you around $500-$1,000 at closing.
Does FHA Streamline Refinance get rid of PMI?
No, the FHA Streamline Refinance does not get rid of mortgage insurance. Refinanced FHA loans still have annual mortgage insurance, as well as a new upfront mortgage insurance fee equal to 1.75% of the loan amount. The upfront fee is added to your loan amount. However, if you use the FHA Streamline Refinance within 3 years of opening your loan, you’ll be refunded part of your original UFMIP fee — thus lowering the total loan amount.
Do I qualify for an FHA Streamline Refinance?
To qualify for an FHA Streamline Refinance, your current home loan must be insured by the FHA. If you’re not sure whether it is, ask your lender. FHA also requires three months of on-time payments, and a 210-day waiting period since the last closing date (either purchase or refinance). Finally, the FHA Streamline Refinance must have a “purpose.” That usually means the refinance needs to lower your combined interest and insurance rate by at least 0.50%.
Does FHA Streamline require a credit check?
Technically, the FHA Streamline does not require a credit check. That means homeowners could potentially use the Streamline Refinance even if their credit score has fallen below the 580 threshold for FHA loans. However, some lenders may require a credit check anyway. So if your credit is on the lower end, be sure to shop around.
Can you cash out on an FHA Streamline?
No, you cannot take cash out on an FHA Streamline Refinance.
What documents do I need for an FHA Streamline Refinance?
The FHA Streamline Refinance is a “low-doc” refinance loan; it requires less paperwork than most other mortgages. But there’s still some documentation required. For an FHA Streamline Refinance, you’ll still need:
– A loan application
– A current mortgage statement showing a 6 month payment history
– Contact information for your employer (the lender may verify employment, but not income)
– Two months’ worth of bank statements showing you can cover out-of-pocket closing costs
– Utility bills showing you use the home as a primary residence
When can I do an FHA Streamline Refinance?
FHA homeowners are eligible for a Streamline Refinance 210 days after their last closing. That means you must have made 6 consecutive mortgage payments since you purchased or last refinanced the home.
Can you do FHA Streamline Refinance twice?
Yes, you can use the FHA Streamline Refinance more than once. You just need to meet FHA’s guidelines — meaning it’s been at least 210 days since your last refinance, you’ve made your last three payments on time, and you can lower your rate around 0.50%.
What are the benefits of an FHA Streamline?
The big benefit of an FHA Streamline Refinance is that you can switch your FHA loan to a lower rate and monthly payment with minimal hassle. Streamline Refinances have limited documentation, so the process is easier and usually quicker. Another benefit of the FHA Streamline is that there’s no home appraisal – so you can refinance into a lower FHA mortgage rate even if you have very little equity or your loan is underwater.
Is FHA Streamline Refinance worth it?
The FHA Streamline Refinance is probably worth it if you can lower your mortgage rate and monthly payment a significant amount. It’s an especially good deal for homeowners who purchased or refinanced from 2010-2015, because FHA has since lowered its annual mortgage insurance rates. By refinancing a pre-2015 mortgage with the FHA streamline, you may be able to drop your annual mortgage insurance rate from over 1% to just 0.85%.
How do I get rid of PMI on an FHA loan?
FHA mortgage insurance premium (MIP) lasts 11 years — if you made a down payment of 10 percent or more — or the full life of the loan if your down payment was less than 10 percent.
The only way to get rid of FHA mortgage insurance is my refinancing your current FHA loan into a conventional loan without PMI. To do this, you’ll need at least 20% equity in your home and a credit score of at least 620 or higher.
What are today’s FHA Streamline rates?
FHA mortgage rates are low and homeowners typically close in less than 30 days. Remember: the faster you close, the bigger your FHA MIP refund.
Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
For any question you can contact us by phone to 305-742-8179 or by email at Refi@MaraidLending.com … and one of our loan experts will speak with you in less that 24 hours.