Articles Tagged With: FHA Streamline Requirements

When Is An FHA Loan Better Than A Conventional Loan?

June 8, 2017

FHA Refinance Loans: Payoffs and Buyouts

We’ve been examining the ins and outs of FHA refinance loans in our last few posts, but one issue we haven’t discussed yet is whether an FHA refinance can be used to buy out an existing title holder, applied for as part of an FHA short refinance, or to pay off land contracts. HUD 4000.1 has a list of the rules in these areas. Where short payoffs are concerned, the rules are fairly simple: “The Mortgagee may approve a Rate and Term refinance where the maximum mortgage amount is insufficient to extinguish the existing mortgage debt, provided the existing Note holder writes off the amount of the indebtedness that cannot be refinanced into the new FHA-insured Mortgage.” Do you need to refinance your existing mortgage in order to buy out | more...

May 25, 2017

FHA Refinance Loan Basics You Should Know

By Bruce Reichstein

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: Some Basics

By Joe Wallace

FHA refinance options for those who already have FHA mortgages include something know as the FHA Streamline Refinance. FHA Streamline Refinance loans allow FHA borrowers to apply for a refinance loan designed to lower monthly payments, interest rates (or both), get out of an adjustable rate mortgage, or refinance from one fixed-rate loan to another. Borrowers can also, according to FHA loan rules, refinance from one adjustable rate mortgage to another. The rules that govern FHA streamline refinance loans are found in HUD 4155.1, Chapter Six, Section B, which begins by explaining that FHA Streamline Refinances: “–are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and — must involve no cash back to the borrower, except for minor adjustments at closing that are not | 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 20, 2015

FHA Streamline Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “When an applicant is applying for a refinance under the FHA Streamline and their spouse (co-borrower) has passed (died), does the remaining borrower need to show the six months of payment history before they can apply for a refinance without doing a credit qualification?” FHA loan rules for streamline refinance loans are found in HUD 4155.1 Chapter Six. Section C has a heading titled, “Seasoning Requirement For A Streamline Refinance” which addresses this reader question. It states: “On the date of FHA case number assignment, –the borrower must have made at least six payments on the FHA-insured mortgage being refinanced –at least six full months must have passed since the first payment due date of the refinanced mortgage, and –at least 210 days must have passed from | more...

What happens to my FHA loan in a natural disaster?

April 29, 2015

FHA Streamline Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “If I need to refinance to remove my ex-husband from my mortgage loan, and he has already signed the quit-claim and put the mortgage in my name only. Do I have to meet the normal 5% payment reduction requirement for the Net Tangible Benefit?” The borrower does not specify whether the refinance loan is an FHA Streamline Refinance loan or a cash out loan, but since this comment was on a post we did on FHA Streamline refinance loans, we’ll assume that’s the loan being asked about. FHA Streamline loans do require a “net tangible benefit” to the borrower as described in HUD 4155.1. That benefit could be a lower monthly payment, lower interest rates, or the fact that the borrower is refinancing from an Adjustable Rate | more...

April 13, 2015

FHA Streamline Refinance Loan Applications: A Reader Question

By Joe Wallace

A reader asked us a question recently about applying for a refinance loan. “Do I mark “YES” on “Credit qualifying Streamline”?” The term, “credit qualifying streamline” refers in this case to an FHA streamline refinance loan that requires a credit check. HUD 4155.1 states the following about credit qualifying: “The purpose of the mortgage credit analysis is to determine − a borrower’s credit performance − a borrower’s capacity to repay the mortgage, and − whether or not the borrower has sufficient funds to close, and – limit collection actions or foreclosure. ” Furthermore, as part of this process, HUD 4155.1 states: “The lender must • verify the borrower’s identity, and • ask sufficient questions of the borrower to get a complete picture of the − borrower’s financial position − source | 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 11, 2014

FHA Refinance Loan Basics: Purposes of the Loan, Limits, and Loan Terms

By Joe Wallace

FHA loan rules permit the refinance of mortgage loans under a variety of circumstances. Borrowers applying for some types of FHA refinancing can go from conventional to FHA, from adjustable rate mortgages to fixed rate, and for those with existing FHA loans, an FHA-to-FHA streamline refinance is also possible. Chapter Three of HUD 4155.1 is where the basic rules covering refinance transactions can be found. Chapter Three begins by stating the basic purposes of a refinance loan which include the following: “A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage • for borrower(s) with legal title, and • on the same property. Note: The borrower is eligible to refinance the loan, as long as he/she has legal title, even | more...

March 7, 2014

FHA Streamline Refinancing Loans Net Tangible Benefit Table

By Joe Wallace

Recently we wrote about the requirements for FHA streamline refinance loans to have a “net tangible benefit” to the borrower. The type of benefits mentioned in the FHA loan rulebook for streamline loans (in general) include a lower interest rate and/or monthly payment for the borrower. The purpose of an FHA streamline refinance loan is to help a home owner with an existing FHA mortgage get into a more affordable mortgage loan payment without an FHA required credit check or appraisal. (The lender may require one anyway.) Since there are many different types of FHA loans available, the net tangible benefit for the borrower may be different depending on the kind of loan being refinanced. The FHA has a table showing all the requirements for the different types of loans | more...