FHA Streamline Refinance

This guide covers FHA streamline refinance guidelines. Homeowners with current FHA loans still have the 0.55% FHA annual mortgage insurance premium. They may want to take advantage of FHA streamline refinance mortgage guidelines and see if they will get a net tangible benefit with the new FHA annual mortgage insurance premium of 0.55% FHA MIP. Borrowers with FHA mortgage rates higher than 7.5% may want to do an FHA streamline refinance with no closing costs, income, credit, or appraisal required. FHA streamline refinance guidelines do not require a new appraisal, no income verification, and no credit scores.

The only thing that FHA streamline refinance guidelines require is that the homeowner has a 12-month past timely mortgage payment history. FHA streamline refinance mortgage loan applicants can have late payments in the past 12 months with other creditors except for their mortgage payments.

Debt-to-income ratios will no longer be an issue when it comes to FHA streamline refinance mortgage loans. This is because the mortgage lender will not verify the income. Credit scores are not required. However, if homeowners have great credit, we can use credit scores to get the borrower the best possible FHA mortgage rates. In the following paragraphs, we will cover FHA streamline refinance guidelines on FHA loans.

FHA Streamline Refinance Guidelines on Home Appraisals

HUD, the parent of FHA, per FHA Streamline Refinance Guidelines does not require a new FHA home appraisal. This is because, in the eyes of HUD, they are insuring FHA loans. The borrower has already gone through an FHA appraisal on a property. The homeowner has been paying your mortgage payments on time. So why to order another appraisal since the home is already FHA insured? HUD will go by the homeowner’s original purchase price as the home’s value, no matter what the home is currently worth.  The home can be worth less than the balance of your mortgage, and you can still qualify for an FHA streamline mortgage loan.

FHA Streamline Refinance Guidelines: Easiest and Fastest Loan Closing

FHA Streamline Refinance Guidelines are so streamlined that streamline refinance mortgage loans close in 2 to 3 weeks. They are the easiest mortgage loans that are out there. No employment verification is required with the FHA Streamline Refinance mortgage. Homeowners with a current FHA loan can do an FHA streamline refinance with no income documentation required, no home appraisal required, and income/credit underwriting process required.

The only thing that is required for pricing rates is the borrower’s credit scores. Most FHA streamline refinance mortgage loans close in less than three weeks.

Income verification on borrowers is also not required, so homeowners do not have to worry about debt-to-income ratios. Credit scores are not required with FHA streamline mortgage refinance loans. So you can have a recent late payment with your other creditors. However, you must have been current on your home mortgage for the past 12 months. Another major exemption is that no appraisal is required for FHA streamline refinances.

Eligibility Requirements For FHA Streamline Refinance

FHA streamline refinance guidelines allow borrowers with a current FHA loan to refinance to a fast-track FHA loan called FHA streamline refinance mortgage loan. To be eligible for an FHA streamline refinance, all borrowers on the current FHA loan must be on the new FHA streamline refinance loan.

This holds true for the main borrowers, co-borrowers, or non-occupant co-borrowers. Homeowners cannot add or take off an original borrower or any co-borrowers.

The borrower needs to meet HUD NET TANGIBLE BENEFIT REQUIREMENTS to qualify for FHA Streamline Refinance. The borrower’s new PITI needs to lower than the current FHA loan being streamlined. Homeowners who intend to take out an original co-borrower or co-borrowers need to do a regular FHA refinance mortgage loan. Income verification, credit scores, and full-rate and term refinance appraisal are required.

Documents Needed For FHA Streamline Refinance Loans

The great news for homeowners with FHA streamline refinance mortgage loans is that they will not need the dozens of items required when they first got their original FHA home purchase loan: no tax returns, no W-2s, no bank statements, no income verification.

Bad credit is no problem to do an FHA streamline refinance mortgage. FHA Borrowers can have bad credit, late payments, recent collections, and charge-offs.

Other derogatory credit on their credit report are allowed and still qualify for FHA Streamline Refinance Mortgages. All that is required is for the Borrower to be current with their current FHA loan payments for the past 12 months. One 30-day mortgage late payment is allowed. Homeowners get to skip two mortgage payments after their streamline refinance.  Gustan Cho Associates will cover all closing costs with a lender credit. There is no money out of pocket.

How Does HUD FHA Streamline Refinance Mortgage Process Work

In short, under HUD FHA Streamline Refinance, a borrower can refinance their current FHA loan at a lower interest rate. By doing so, homeowners save money. One of the best features of the FHA streamline is you do not need an appraisal. A great option if you are underwater on your mortgage. You can even complete an FHA streamline refinance mortgage process without a full tri-merge credit report being pulled.

HUD FHA Streamline Refinance Qualification Requirements

Below are a few basic qualifications:

• The FHA must already insure the mortgage
• The mortgage must be current and not delinquent
• You must pass a net tangible benefit worksheet; the loan must save you money per HUD guidelines
• You may not receive additional cash out over $500

HUD FHA Streamline Refinance Ads By Lenders

Money lenders advertise FHA streamline refinance loans as a “no-cost” refinance. This is partly because you do not have to pay for an appraisal to complete an FHA streamline mortgage. They are not telling you that they offer a higher interest rate to cover the closing costs and mortgage fees. You would get an even lower interest rate if you paid these out-of-pocket. Unlike a rate and term refinance, with an FHA streamline mortgage, you may NOT roll closing costs into the total mortgage amount. Is there a catch? No, not really. It is a win-win for both sides. You save money on your mortgage each month.  FHA gets paid with the mortgage insurance premiums from the new mortgage.

Credit and Income Qualification Requirements

What are the qualifications?

• Technically there is no credit score requirement.
• Although you will receive better terms if you choose to have your credit pulled
• Homeowners must have made at least six payments on their current FHA mortgage before being eligible to complete a HUD FHA streamline mortgage.
• The company must verify that the last 12 payments have been on time if you have been in your mortgage for more than six months.
• The mortgage company can do this through a full “tri-merge” credit report or a “mortgage only” credit report.
• The “mortgage only” credit report pulls your mortgage tradeline along with your credit scores, allowing the lender to verify on-time mortgage payments.

Before you may enter into an FHA streamline, at least 210 days must have elapsed from your closing date. Besides on-time payments, you must pass a net tangible benefit worksheet.

Net Tangible Benefit Requirements on HUD FHA Streamline Mortgage

Net tangible benefit:

• Please reference the image below.
• A typical rule of thumb is you must lower the overall interest rate by at least .5%
• This includes monthly mortgage insurance premiums.
• Older FHA mortgages may no longer carry mortgage insurance, making it tough to qualify for a HUD FHA streamline refinance
• Lowering the rate by at least .5% is becoming more and more difficult as interest rates are on the rise.
• The majority of FHA borrowers are currently on a fixed-rate mortgage

The credit of photo: http://www.hud.gov/sites/documents/40001HSGH.PDF

Maximum Loan Amount Per HUD FHA Streamline Refinance Guidelines

Maximum Loan Amount Calculation. As stated above, you may not receive additional cash during a HUD FHA streamline refinance over $500. There is a specific worksheet that the mortgage company must fill out.

Starting HUD FHA Streamline Refinance Process With a Lender With No Overlays

How to start the HUD FHA streamline refinance mortgage process? A HUD FHA streamline refinance is one of the easiest mortgages to close due to the minimum requirements of documentation. What do you need to send to us?

• Current FHA Mortgage Statement
• Mortgage NOTE (in your closing package)
• 60 days bank statements – if you are paying closing costs out of pocket

From that point, we will decide if it’s best to use a “credit qualifying” or “non-credit qualifying” FHA streamline. Many clients come to us to buy a home when their credit scores are not quite where they want them to be. We can still close their mortgage, and we typically complete in FHA streamline six payments down the road.

When Will Credit Scores Improve

Once you have a mortgage reporting on your credit report with on-time payments, your credit score will skyrocket. At that point, you should qualify for a lower interest rate (depending on the market climate). We have many success stories with troubled clients qualifying for FHA mortgages without lender overlays. Please read our consumer reviews!

Over 80% of our borrowers at Mortgage Lenders for Bad Credit could not qualify at other mortgage lenders. The team at Mortgage Lenders for Bad Credit has a national reputation for being able to do mortgage loans other lenders cannot do.

Mortgage Lenders for Bad Credit are mortgage brokers licensed in 48 states, with over 190 wholesale lending partners. For more information on HUD FHA streamline refinance or any other mortgage-related questions, please contact Alex Carlucci. You can call or text 630-915-1550 or text for a faster response. Or send an email to alex@gustancho.com.   The team at Mortgage Lenders for Bad Credit is available seven days a week, evenings, weekends, and holidays.

HUD FHA streamline refinance guidelines and mortgage process with no appraisal/no income verification

• All original borrowers on the original loan including non-occupant co-borrowers need to be on the new FHA Loan.
• Homeowners need to have a net tangible benefit with the new FHA Loan in order to qualify for streamline.

Here are the basics and eligibility requirements on FHA Streamline Refinance:

• Homeowners whose existing mortgage is insured by HUD are eligible for streamlines
• Homeowners need to be current on their existing FHA Insured Mortgage
• Homeowners cannot have no more than one 30-day mortgage late payment in the last 6 months
• To qualify for streamline refinances, homeowners new monthly principal and interest monthly payments need to have a net tangible benefit of at least 5% lower
• All original borrowers need to be on the new refinance mortgage
• Only rate and term refinances are permitted

Cash-Out refinances are not allowed.

FHA Streamline Refinance Versus Cash-Out Refinance

There are instances where homeowners want to do other types of refinancing mortgages. Many times, there are non-occupant co-borrowers on their FHA Loans and borrowers want to take out them off the loan. With cases like these, homeowners will need to do a full rate and term refinance which is different than streamlines. Income documentation and credit scores are required.

It is like going through the whole mortgage process with the home appraisal. Same with cash-out refinance mortgages. HUD allows up to 85% loan to value on FHA cash-out refinances.

A new appraisal, credit scores, and income are required on both of these types of refinance loan programs. Mortgage Lenders for Bad Credit Mortgage Group has no overlays on FHA Loans. To start the pre-approval mortgage process with Mortgage Lenders for Bad Credit, please contact us or text us for a faster response at 800-900-8569. Or email us at alex@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Required Documents For Streamline Refinance Loans

The required documents are a copy of the mortgage note, a recent mortgage statement, a homeowners insurance declaration page, copies of borrowers’ and co-borrowers drivers licenses, and social security cards. Homeowners can contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response anytime.

Gustan Cho Associates are mortgage lenders licensed in 48 states (Not yet licensed in New York, and Massachusetts). The team at Gustan Cho Associates are experts in commercial, business, and residential loans.

Gustan Cho Associates has a national reputation for being a one-stop mortgage shop. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays via phone, text, or email at gcho@gustancho.com. Gustan Cho Associates are mortgage brokers licensed in 48 states, including Washington, DC, Puerto Rico, and the United States Virgin Islands. Most FHA streamline refinance mortgage loans that can close in two to three weeks. The FHA streamline refinance mortgage process is simple, streamlined, and requires very limited documentation. This guide on FHA Streamline Refinance Guidelines was updated on June 19th, 2023