Articles in Category: Streamline Refinance

December 20, 2011

When Can I Get an FHA Streamline Refinancing Loan?

Borrowers who take out FHA insured mortgages are eligible to apply for FHA Streamline Refinancing loans, which features reduced paperwork and underwriting requirements in many cases compared to other refinancing options including cash-out refinancing loans and similar transactions. There are plenty of reasons why now might be a good time for some borrowers to consider refinancing an FHA guaranteed mortgage–Streamline Refinancing features a lower monthly mortgage payment, lower interest rates, or both with certain exceptions. For example, if a borrower is refinancing from an adjustable rate mortgage to an FHA fixed-rate loan, the interest rate on the refinanced loan may be higher than the variable rate. These features sound good to many FHA borrowers, but how soon after purchasing a home with an FHA mortgage can a home owner begin | more...

November 10, 2011

Situations That Can Affect Your FHA Refinancing Loan Application

By Joe Wallace

FHA refinancing loans have maximum loan amounts in the same way new purchase FHA mortgage loans do. Maximum refinancing loan amounts can be complicated depending on the type of loan and the situation the borrower is in when they want to refinance the property. A borrower’s individual circumstances can also affect basic eligibility for some types of refinancing loans, which is why it’s a very good idea to begin planning early for a refinance loan application. For example, it’s one thing for a home owner to apply for FHA Streamline Refinancing for the home they own and occupy–the rules are fairly straightforward. But what happens when someone who purchased an investment property needs to occupy that property as their primary residence and refinance the loan? According to FHA loan rules, | more...

November 9, 2011

FHA Streamline Loan Basics

By Joe Wallace

FHA insured loans have been eligible for Streamline Refinancing since the early 80s. According to the FHA official site, there are some common misconceptions about Streamline Loans that FHA borrowers and home owners should know before applying for these refinancing loans. For example, “Streamline” refers to the reduced amount of paperwork, qualifying requirements and other details involved in these mortgages. It does not mean there are no costs to the borrower or that no money will be paid out of pocket for an FHA Streamline mortgage. Borrowers do have the option of including costs of the loan into the mortgage, but that can seriously change the way the loan is handled if including those costs increases the loan amount too much. What are the basic requirements for an FHA insured | more...

November 4, 2011

FHA Credit Qualifying Streamline Refinancing

By Joe Wallace

FHA loans feature a refinancing option known as Streamline Refinancing, which features no credit check, no cash back to the borrower, and reduced paperwork due to the borrower’s status as an FHA borrower in good standing. An FHA Streamline Refinancing loan has several requirements including a rule which states the new loan must result in lower payments, lower interest rates, or both. But there’s also a credit qualifying FHA streamline loan option. According to the FHA rulebook, “Credit qualifying streamline refinances contain all the normal features of a streamline refinance, but provide a level of assurance for continued performance on the mortgage.” For these types of refinancing loans, “The lender must provide evidence that the remaining borrowers have an acceptable credit history and ability to make payments.” In what circumstances | more...

October 24, 2011

FHA Streamline Refinancing Rules: Adding and Removing Borrowers

By Joe Wallace

When an FHA borrower wants to refinance an FHA mortgage using FHA streamline refinancing, there are sometimes questions about adding or removing a borrower from the title. This may be needed for several reasons. If a borrower is getting a divorce, for example, refinancing the property under a single name would make sense. The same goes for a single borrower who is refinancing in connection with getting married–he or she might want to add the spouse to the title. When does the FHA allow the borrower to add or remove another person to the title during an FHA streamline loan? According to the FHA official site, adding a borrower is simple. “Individuals may be added to the title on a streamline refinance without a credit worthiness review, and triggering the | more...

September 29, 2011

FHA Loan Questions: What Is The Maximum For An FHA Streamline Refinance Loan?

By Joe Wallace

FHA rules for Streamline Refinancing Loans changed in 2011, and there are updated guidelines borrowers and lenders need to know when trying to determine what the maximum loan amount might be for a particular borrower. Under the old rules (for cases assigned before April 18, 2011) there were two sets of guidelines. One set was for FHA streamline refinancing without an appraisal. For these loans, the old system allowed refinancing maximums that did not exceed the principal outstanding balance, minus any up front mortgage insurance premium refund, plus the amount of the new up front mortgage insurance premium (UFMIP). The old FHA streamline limits also included a “with appraisal” maximum which was based on the lower of the outstanding principal balance minus any UFMIP refund, plus closing costs and prepaid | more...

August 15, 2011

FHA Streamline Refinance Rules for “Net Tangible Benefits”

By Joe Wallace

The FHA changed the rules on Streamline Refinancing Loans for all case numbers assigned on or after April 18, 2011. The new regulations now include a requirement that the lender must “determine that there is a Net Tangible Benefit (NTB) to the borrower as a result of the streamline refinance transaction”. Those tangible benefits include specific requirements based on the type of refinancing loan. For example, a fixed-rate loan that is refinanced to another fixed rate mortgage must have a five percent minimum reduction in the principal, interest and mortgage insurance payment, also described as PI & MIP. For FHA Streamline Loans which refinance fixed-rate mortgages to a One Year Adjustable Rate Mortgage, the requirements include a minimum two percent reduction in interest. Fixed rate FHA loans to Hybrid ARMs | more...

July 21, 2011

FHA Streamline Refinance Loans and Mortgage Term Reductions

By Joe Wallace

FHA loans are available with terms of 15 and 30 years. Borrowers can choose shorter loans with higher payments, or they can choose a longer loan term and lower payments depending on what their financial priorities are. The shorter-term loan with higher monthly payments can result in less money being paid in interest over the lifetime of the loan, but for many borrowers the higher monthly obligation isn’t as affordable. Choosing the right loan term for your financial goals and monthly budget can be tricky. Some choose the longer loan term to maintain their monthly budget, but as people progress in their careers it may be more affordable later to take on those higher payments. Some decide simply to pay more than the monthly amount due, but others may seek | more...

July 5, 2011

FHA Streamline Loan Changes

By Joe Wallace

The FHA Streamline loan program is a refinancing option for FHA borrowers which in most cases allows a no-credit-check refinancing loan. Changes to the program has modified the terms and conditions of FHA streamline loans, and FHA borrowers who looked into the program in the past should know about the updates in order to make a properly informed decision on when to apply for streamline refinancing. The FHA breaks down the modified streamline refinancing loan rules into two different categories. The first is for cases assigned on or after 4/18/2011. the second is for cases between 11/17/2009 and 04/17/2011. The most important details for the new streamline FHA refinancing loan rules affects both categories in the same way. For example, the FHA requires streamline loans the result in a “net | more...

May 3, 2011

FHA Loans, Appraisals and Refinancing

By Joe Wallace

FHA loan applicants who find a suitable home and want to buy it must wait out the required FHA appraisal process before a loan can be approved. The FHA appraiser’s job is to make sure the home meets minimum property requirements and to assign the fair market value. The fair market value establishes a baseline for the FHA loan amount and is a very important part of the process. That appraisal has an expiration date. According to FHA rules, ” Effective for all case numbers assigned on or after January 1, 2010 the validity period for all appraisals on existing, proposed, and under construction properties, including HUD REO appraisals that have an effective date of on or after April 1, 2010, will be 120 days.” That doesn’t give the borrower | more...