Keeping on the theme of ways to refinance if you owe more on your house than it’s worth…
If you currently have an FHA mortgage you can do a Streamline Refinance.
Some key aspects of this loan are… the mortgage approval process for an FHA Streamline Refinance says :
1) Employment verification is not required with an FHA Streamline Refinance.
2) Income verification is not required with an FHA Streamline Refinance.
3) Credit score verification is not required with an FHA Streamline Refinance.
4) The kicker: No appraisal is needed!
Here are some basic guidelines to see if you are eligible for an FHA streamline…
1) Perfect, 12-Month Payment History Is Required.
2) Loans must be current at the time of closing.
3) The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.
4) Streamline Refinance applicants must demonstrate that there’s a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. A Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking “cash out” to pay bills is not an allowable Net Tangible Benefit.
5) Loan Balances May Not Increase To Cover Loan Costs. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs — origination charges, title charges, escrow population — must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a “zero-cost FHA Streamline”.
If you have an FHA loan and would like to see if you qualify for a Streamline Refinance – just give me a call, shoot me an email, or apply on my web site!
Brett
To sign up for my weekly mortgage quick tips – CLICK HERE.