Articles Tagged With: FHA Streamline Refinance

May 25, 2017

FHA Refinance Loan Basics You Should Know

If you have an existing home loan, you may be qualified to apply to refinance that loan with an FHA mortgage. This option can help you get cash out based on the value of your home, or it can help you get into lower mortgage payments depending on the type of loan you are eligible for. Which FHA refinance loan is right for you? FHA Cash-Out Refinancing Cash-out loans are for qualified borrowers with FHA or non-FHA mortgages. Cash out refinancing allows borrowers to get cash back when there is money left over after paying off the original mortgage, plus any applicable fees. Cash-out refinance loans guaranteed by the FHA require both a new credit check and appraisal. The new appraisal is required in order to determine the current market | more...

August 18, 2015

FHA Streamline Refinance Loans: Basics For Credit Qualifying Streamline Refinancing

By Joe Wallace

In our last blog post we discussed some basics on FHA Streamline Refinance Loans. The FHA Streamline Refinance loan program permits lenders to process the loan paperwork for these refinances (FHA-to-FHA only) with no credit check in most cases. But lenders are free to require a credit check, and there are some cases where the credit check is required if add-ons to the loan cause the borrower’s monthly payments to increase by 20% or more, but there are other circumstances that may also require credit-qualifying. HUD 4155.1 states: “A credit qualifying streamline refinance must be considered: –when a change in the mortgage term will result in an increase in the mortgage payment of more than 20% –when deletion of a borrower or borrowers will trigger the due-on-sale clause –following the | more...

June 26, 2015

FHA Streamline Refinance Loans: Appraisal Required?

By Joe Wallace

When you examine your streamline refinance options, it’s easy to get confused over the difference between lender requirements and FHA refinance loan standards. FHA Streamline Refinance Loans are intended for borrowers with existing FHA mortgages and can be done on any type of existing FHA loan–fixed rate, adjustable rate, graduated payment mortgage, etc. Some borrowers want to know if there is a new credit check or appraisal required. There is no short answer to this because while FHA loan rules do not demand a new appraisal, the lender may require one. The credit check issue also depends on a variety of circumstances including the type of refinance transaction (fixed rate to adjustable rate, for example) and how long the borrower has owned the property. FHA loan rule spell out some | more...

May 8, 2015

FHA Refinance Loans And FHA Case Numbers: A Reader Question

By Joe Wallace

A reader asks, “I bought my home in 2009. Its a FHA mortgage. I do not qualify to refinance because paperwork and case number were assigned after may 1 2009. I need to know what I can do to refinance with a FHA mortgage I need to Lower my payments, smaller interest rate shorten time on contract I feel like im stuck. There has to be a way to get this done.” It’s not clear why this reader believes an FHA home loan isn’t eligible to be refinanced because of the date of the case number–qualified borrowers are free to apply for FHA refinancing for their home loans regardless of the date of the case number, provided a minimum of six months and six mortgage payments have been made. That’s | more...

August 26, 2014

FHA Streamline Refinance Loan Rules: A Reader Question

By Joe Wallace

A reader asks, “I currently have an FHA loan that I have had for 5 years and would like to streamline,but the maximum loan amount has changed since I got the loan and the new limit is less than what I owe. Does the new limit apply to streamline loans as well as new loans?” The FHA and HUD issued some guidance back in 2013 to clarify the rules for maximum loan amounts for FHA Streamline Refinancing. According to Mortgagee Letter 2013-29, the following clarification affects how the maximum amount is calculated, and what can be included in the loan amount when calculating that maximum. “Mortgagees are reminded that when processing an FHA-insured streamline refinance mortgage, the new maximum mortgage amount must always be calculated starting with the outstanding principal balance on | more...

March 14, 2014

FHA Streamline Refinance Loan Maximums

By Joe Wallace

If you want to refinance your existing FHA home loan with an FHA Streamline Refinance loan, you likely want to know what the maximum loan amount would be for the transaction. Borrowers who apply for Streamline Refinance loans are often able to do so with no credit check or appraisal (depending on the lender) and there’s no cash back to the borrower for this type of refinance loan. The maximum FHA loan for Streamline Refinance transactions may depend on whether you have a lender-required appraisal or not. According to HUD 4155.1, the maximum FHA mortgage loan for Streamlines without an appraisal are as follows: “The maximum insurable mortgage for streamline refinances without an appraisal cannot exceed the outstanding principal balance • minus the applicable refund of the UFMIP, • plus | more...

March 7, 2014

FHA Streamline Refinancing: “Net Tangible Benefits”

By Joe Wallace

Recently we posted about FHA streamline refinance loan options. FHA streamline loans are for existing FHA mortgages and feature no money back to the borrower. That means there is no FHA-required credit check or appraisal, though the lender may require one. FHA Streamline Refinancing rules as printed in HUD 4155.1 state that in most cases an FHA streamline refinance must result in a “net tangible benefit” to the borrower. What does this mean and how can a borrower know what those benefits will be? HUD 4155.1 Chapter Six says, “The lender must determine that there is a net tangible benefit to the borrower as a result of the streamline refinance transaction, with or without an appraisal. Net tangible benefit is defined as • a 5% reduction to the principal and | more...

March 6, 2014

FHA Streamline Refinances–What’s Possible?

By Joe Wallace

FHA Streamline refinancing loans are for existing FHA mortgages. They feature no FHA-required appraisal in most cases, and there is no FHA-required credit check in most cases. Some borrowers who want to apply for this type of FHA refinance loan may wonder if the transaction they have in mind is possible under the rules of the FHA loan program. For example, some borrowers want to refinance from a conventional mortgage to an FHA refinance, which is not possible under the FHA Streamline program (but is under FHA Cash-Out Refinancing). What transactions ARE permitted? According to HUD 4155.1, Chapter Six, Section C under the heading “Types Of Permissible Streamline Refinances” we find a list of the following: • no cost refinances • ARM to ARM refinancing • ARM to fixed rate | more...

November 16, 2012

FHA Loan Refinancing: Subordinate Liens

By Joe Wallace

A reader asks, “My husband and I have a FHA mortgage. We have had the mortgage since 2005. A couple of year ago I lost my job and we got behind.” “FHA gave us a 2nd mortgage with no interest and we only had to pay it off when we paid off the loan. I am not sure if it was called a modification.” “Our rate is 6.50%. We have been only 1 x 30 since then and we are current now. Do you think a streamline would work for us and if so would FHA subordinate the 2nd as it is?” It’s impossible to comment on whether a loan “works” for an individual as so much about home loan refinancing depends on individual circumstances, but the subordinate lien question | 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...