FHA has a program where existing FHA mortgage holders can refinance their loan with minimum documentation and underwriting requirements.
The basic requirements of a streamline refinance are:
- The mortgage to be refinanced must already be FHA insured;
- The mortgage to be refinanced should be current (not delinquent);
- The refinance is to result in a lowering of the borrower's monthly principal and interest payments; and
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
Lenders may offer FHA streamline refinances in several ways.
Some lenders offer a "no cost" refinance. This means that there are no out-of-pocket expenses to the borrower, and nothing is added to the existing mortgage balance. Instead, the lender will charge a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.
Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, so an appraisal will be required. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount.
If you have an existing F no HA loan and if you have made your last 12 mortgage payments on time, then you are already approved. There's no employment, income or asset verification, and if you opt for the no cost streamline refinance program, there's no appraisal, either. So you really can easily refinance your FHA mortgage with minimal hassles.
Under the FHA Streamline Refinance Program, you can either lower your payments or shorten the term of the mortgage - or both!
You can do a streamline refinance with an FHA lender of your choice. While it might be the best place to start shopping for a streamline refinance mortgage, you do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your FHA mortgage.
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Lew Corcoran |
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From what I have heard, the main reason the country is in such a fix is because of all the FORECLOSURES. To date, I have seen very little help to keep those folks in their homes! I called my lender the other day, told them I was having trouble making my payment and asked for an interest rate reduction. They told me they could not give me one. I have a 30 yr. fixed 8.1% interest loan! They said I would have to let my mortgage go into default, fill out an application explaining why my payment should be reduced, and they would either work with me, or foreclose on me. By the way, if my income has dropped, my debit to income ratio and my declining credit score would probably disquailfy me frm getting a refinaince. (Flagstar Mortgage Company). I see rates are anticipated to be down around 4.5% soon. It is a real shame that existing homeowners are not able to cash in on those rates and stay in their homes!!! I was 11 days late on my last mortgage payment, after several years of no late payments. Is there still hope for me?